PHNOM PENH – Cambodia appears to be the latest beneficiary of the US-China trade war, joining the already exhaustively profiled Vietnam among the countries enjoying increased exports to the US as tariffed Chinese goods open the door for other cheap suppliers. Latest US government data show annual imports from Cambodia rising significantly since the start of the year, with the US$1.8 billion registered from January-May a roughly 20% increase on the same period last year. Like Vietnam, Cambodia has duty-free access to American markets under the Generalized System of Preferences, a trade program designed to promote economic growth in the developing world. Trade represented 125% of Cambodia’s gross domestic product (GDP) in 2017, according to the World Bank. In 2018, the bulk of Cambodia’s goods exports to the US were clothing and footwear, with the Office of the US Trade Representative listing the top four sectors as knit apparel ($1.8 billion), woven apparel ($628 million), leather products ($390 million), and footwear ($329 million). Cambodia’s 2018 trade surplus with the US was $3.4 billion — which, though relatively-small compared with Vietnam’s near-$40 billion for the same year — will continue to rise this year as Cambodia’s exports to the US surge. Parsing the numbers for a direct trade war link is not as clear-cut as it may seem, however, with both Vietnam – where trade represented 188% of GDP in 2018 – and Cambodia expanding their commerce with the US since before the start of the tariff war.
SINGAPORE — China’s top security official articulated today (June 2) an uncompromising defense of his country’s stance on the contested South China Sea and threats to invade Taiwan in an anticipated address at a top security conference in Singapore. “Building facilities on one’s own territories is not militarization,” Lieutenant General Wei Fenghe said, responding to accusations that China has militarized islands in the sea as a means of taking effective control of what the US and others regard as international watersWei also warned of a “fight to the end” with the US in their escalating trade spat, and a “fight at all costs” for “reunification” with Taiwan, the island country China considers a renegade province. The US has recently upped its strategic support for the democratically-run Taiwan, much to Beijing’s chagrin.“No attempts to split China will succeed. Any interference in the Taiwan question is doomed to failure,” said Wei, dressed in his People’s Liberation Army (PLA) uniform.
KUALA LUMPUR — New economic data shows that foreign remittances sent to Asian countries hit US$300 billion for the first time last year, underscoring the ever-rising importance overseas work for the region’s laborers despite world-beating economic growth rates. Freshly released World Bank statistics put the total amount of remittances for 2018 to countries in South Asia, Central Asia, Southeast Asia, East Asia and the Pacific at $299.6 billion, a sum that does not include what are believed to be substantial informal flows of money sent home by regional migrants. Globally and in Asia, remittance figures are growing year by year, despite heady 6-7% gross domestic product (GDP) growth in countries such as the Philippines, a nation which has around 10 million of its citizens working abroad across various vocations. The 2018 amount of regional remittances was around $25 billion greater than in 2017 and $125 billion more than in 2008. Worldwide, remittance flows now account for more than foreign direct investment to middle and low income countries excluding China, the World Bank data shows.
BANGKOK — The arrest last week of a high-profile journalist in the Philippines and a gag order against a Thai television station are the latest reminders that Southeast Asia’s press freedoms rest on the whims of governments. But after investors poured a record $145 billion into the region last year, there is little reason to think they will be deterred by the latest clampdowns. Last year’s inflow, recently reported by the United Nations Conference on Trade and Development, included an unprecedented sum for Vietnam, a one-party communist state. As usual, around half of the money went via Singapore, which has been ruled by the People’s Action Party since independence in 1965 and where reporting is stymied by prolific use of the courts against foreign critics of the ruling elites. “In general, if we compare to other factors — political stability, infrastructure, predictability of rules — [press freedom] is not a decisive factor” in investment moves, said Miha Hribernik, head of Asia politics research at Verisk Maplecoft. Nonetheless, a free press can at least inform business decisions, according to Ebb Hinchliffe, Executive Director of American Chamber of Commerce of the Philippines, and John D. Forbes, Senior Adviser to the chamber. “A responsible free press is more useful and important than a censored one for the purpose of being informed,” they said in an email.
SINGAPORE — U.S. President Donald Trump announced that he would hold a second summit with North Korean leader Kim Jong Un in Vietnam on Feb. 27-28. “Our hostages have come home, nuclear testing has stopped, and there has not been a missile launch in more than 15 months. If I had not been elected president of the United States, we would right now, in my opinion, be in a major war with North Korea,” Trump said in his State of the Union address in Washington late Tuesday. “Much work remains to be done, but my relationship with Kim Jong Un is a good one.” Vietnam, which opened up its economy under Doi Moi reforms in the 1980s, has also been touted by the U.S. as a possible model for Pyongyang to follow. The country emerged as a likely host after Secretary of State Mike Pompeo visited last July, shortly after the first Trump-Kim summit in Singapore. Pompeo lauded the “once-unimaginable prosperity and partnership” between Vietnam and the U.S., before turning to North Korea.
JAKARTA — Southeast Asia is bucking the global trend of falling direct foreign investment, as the low-cost fast-growing region solidifies its position as an attractive location for multinationals. James Dyson’s recent decision to relocate the headquarters of his eponymous technology business to Singapore is not about Brexit, the company said. Rather, the British tycoon said he is looking to a region that continues to exhibit solid growth — “future proofing” as his chief executive termed it. The move follows an October announcement that Dyson — famous for its vacuum cleaners — will make electric vehicles in Singapore, citing the city-state’s proximity to “high-growth markets” in emerging Asia, where annual gross domestic product could grow by 6.1% between now and 2023, according to the Organization for Economic Cooperation and Development. Asia received a third of global investment in 2018 and accounted for nearly all the year’s investment growth, according to the United Nations Conference on Trade and Development. This is despite global foreign direct investment (FDI) declining 19% in 2018. Japanese retailer Aeon opened a second large mall in Cambodia in June as part of its regional expansion plans, which this year will include new shopping centers in Hanoi and Bogor, Indonesia. “As for South East countries, generally speaking, they have been showing rapid economic growth and will keep their pace in future, too,” an Aeon Asia spokesperson said.
SINGAPORE — The decision by Vietnam’s ruling Communist Party to endorse General Secretary Nguyen Pho Trong as the country’s next president is akin to China’s shift to centralized rule under Xi Jinping — albeit with more limitations. The presidency has been vacant since last month’s death of Tran Dai Quang, and Vietnam’s National Assembly is expected to rubber-stamp Trong as the replacement during a monthlong session starting on Oct. 22. “The central committee has discussed about the merging for quite a long time, therefore the recent move — though it might seem accidental due to Mr. Quang’s death — it should be seen as deliberate,” said Nguyen Khac Giang, Senior Political Researcher at the Vietnam Institute for Economic and Political Research in Hanoi. “It will be the new normal of Vietnamese politics.”
SINGAPORE — It was tame enough weighed against his usual invective, but by itself Philippine President Rodrigo Duterte’s account of a conversation he had with his Chinese counterpart, Xi Jinping, was startling. During a meeting between the two leaders in Beijing in May 2017, the subject turned to whether the Philippines would drill for oil in a part of the South China Sea claimed by both countries. Duterte said he was given a blunt warning by China’s president. “[Xi’s] response to me [was], ‘We’re friends, we don’t want to quarrel with you, we want to maintain the presence of warm relationship, but if you force the issue, we’ll go to war,” Duterte recounted.
SINGAPORE — China has long bristled at the U.S. Navy’s “freedom of navigation operations” in the South China Sea, which challenge Beijing’s territorial claims in the disputed waters. So when Zhao Xiaozhuo, a senior colonel in the Chinese army, found himself with a chance to complain about them directly to U.S. Secretary of Defense James Mattis recently, he took it. The U.S. operations are a “violation of the law of the People’s Republic of China, of territorial waters,” Zhao told Mattis during a conference in Singapore on June 2. Mattis defended the naval operations by citing a 2016 international tribunal decision that dismissed China’s expansive “nine-dash line” claim to much of the sea.
JAKARTA — Long before emerging as one of the leading proponents of Brexit, Michael Gove’s role as British education minister took him to Asia, where he declared in 2010 that “places like Shanghai and Singapore put us to shame,” when it comes to quality of schooling. Perhaps Gove should not have been surprised, given that the previous year Shanghai topped the Organization for Economic Cooperation and Development’s PISA science rankings. The Program for International Student Assessment scores are published every three years and rank students in mathematics, science and reading. Eight years on, it is not only well-funded Asian schools such as those in Singapore, which topped PISA’s 2015 rankings, that are outpacing the West, according to a new World Bank report on education in the Asia-Pacific region. “Average performance in Vietnam and in B-S-J-G [Beijing, Shanghai, Jiangsu and Guangdong] regions in China surpassed OECD member countries,” said the report.