KUALA LUMPUR — Indonesia has sent an armada of warships and fishermen to waters around its northern Natuna Islands in response to recent incursions by dozens of Chinese fishing boats and coastguard ships. China’s sweeping claim to most of the South China Sea overlaps with Indonesian waters around the Natunas, with the latest flare-up prompting the usually soft-spoken Indonesian President Joko Widodo to bluntly assert that “Natuna is Indonesia” during a visit to the contested region last week. Beijing’s claim to the South China Sea, through which between US$3-5 billion worth of trade passes most years, extends 2000 kilometers from the Chinese mainland and has angered neighbouring countries, particularly Vietnam and the Philippines, whose own smaller claims around the sea overlap with Beijing’s.
PHNOM PENH – Chinese telecommunications giant Huawei predicted in late December that the number of 5G connections worldwide would jump from around 20 million in 2019 to over 200 million by the end of 2020. Nowhere will the corporate and geopolitical contest to lead that rollout be more hotly contested than in Southeast Asia. Since a successful launch of commercial 5G services last April in South Korea, where around 3.5 million people have signed up for more expensive high-speed 5G and are using three times the data of 4G subscribers, mobile network providers across Asia could be set to cash in if the technology is made widespread soon. If those millions can soon become tens or even hundreds of millions, 5G, which promises download speeds between 20 to 100 times faster than the current leading 4G system, could revolutionize fields from public transport to healthcare to manufacturing, a potential that Dutch bank ING suggests could be “an economic light-bulb moment.”
PHNOM PENH – Perhaps trying to pick up the pieces after President Donald Trump skipped an October 31-November 4 series of summit meetings organised by the Association of Southeast Asian Nations (ASEAN), a ten country regional organisation, the United States Secretary of Defense Mark Esper spent the last week exchanging bromides and handshakes in South Korea, Thailand, the Philippines and Vietnam. The trip’s purpose, Esper said on the flight to Asia on November 13, is “to reinforce the importance of allies and partners, discuss key issues to make sure that they understand clearly that the INDOPACOM [Indo-Pacific] theater is DOD’s [Department of Defense] number one priority.”
PHNOM PENH –Towering over low shops and French colonial–era townhouses grows a new city in tribute to the politics of the present Phnom Penh was long known as a relatively low-rise city, at least compared to towering neighbours such as Bangkok, Jakarta, Ho Chi Minh City, and Singapore. These cities all saw their skylines shoot up in recent decades – long before Phnom Penh’s belated boom – as their country’s economies expanded and modernised. Cambodia, too, has seen heady economic growth over the past two decades, rarely dipping below 8%. Yet the ravages of war and foreign occupation from the late 1960s until at least the early 1990s meant catch-up for the capital’s skyline did not come until midway through the current decade.
PHNOM PENH – Going by the sometimes breathless reports about how well Vietnam has done out of the US-China tariff joust, a reader would be forgiven for thinking that an authoritarian single-party state where farmers make up 40% of the workforce has been transformed into a kind of scaled-up Singapore, which despite its small size usually sucks in around half the annual foreign investment bound for Southeast Asia. The numbers in so far suggest that Vietnam’s trade war triumph is indeed nigh. Its economy grew by just over 7% in 2018 – though that has dipped a notch, according to government statistics, to around 6.7% so far this year. But even that slight fall-off will nonetheless make for high growth – due in part to record levels of foreign investment, including some business seemingly diverted to Vietnam as American tariffs add to the cost of exporting to the US from China. “Following the US-China trade tensions, there is evidence of companies making adjustments to avoid the high tariffs situation,” said Bansi Madhavani, economist at ANZ Research, part of Australia and New Zealand Banking Group. According to Madhavani’s counterparts at Maybank Kim Eng, part of Malaysia’s Maybank, Vietnam “is emerging as the biggest beneficiary” of those adjustments, “with FDI [foreign direct investment] registration up by +86% in the first quarter of 2019”.
PHNOM PENH – Tax And Spend has rarely been part of the Southeast Asian governance lexicon. And judging by the region’s dismal tax-to-gross domestic product (GDP) ratios, it doesn’t look like that will be changing anytime soon. Newly published revenue statistics compiled by the Paris-based Organisation for Economic Co-operation and Development (OECD) show that the five biggest Southeast Asian economies have ratios of half or less than the 2017 OECD average of 34.2%, though most countries in the region showed small increases in revenues compared with the previous year. The OECD defines the tax-to-GDP ratio as “total tax revenue, including social security contributions, as a percentage of GDP”. While more prosperous countries in Southeast Asia’s vicinity such as Australia, Japan and New Zealand all come in around the 30% mark, Southeast Asia’s own numbers were much lower, with Indonesia at 11.5%, Malaysia on 13.6 and Singapore only slightly above on 14.1. This last number in particular seems surprisingly low given that Singapore’s economy more resembles higher-tax Western counterparts than its neighbours in Southeast Asia.
KUALA LUMPUR — “We do not want to choose between the United States and China.” So said Malaysia’s Deputy Defense Minister Chin Tong Liew during a speech last week on his country’s relations with China. Earlier this month the U.S. Secretary of Defence and his Chinese counterpart told a conference of defence ministers in Singapore that they do not expect other countries to takes sides. But many in Southeast Asia fear this is a choice they will have to make, given the increasingly-acrimonious Chinese-American rivalry.
KUALA LUMPUR — U.S. Secretary of State Mike Pompeo has singled out China for its “extreme hostility” to religion and accused the ruling Communist Party of demanding “that it all alone be called God.” Pompeo was speaking at the release of the U.S. Government’s 2018 Report on International Religious Freedom on June 21. “In China, the government’s intense persecution of many faiths — Falun Gong practitioners Christians, and Tibetan Buddhists among them — is the norm,” Pompeo said. “The Chinese Communist Party has exhibited extreme hostility to all religious faiths since its founding. The party demands that it alone be called God.”
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.
SINGAPORE — In a highly-anticipated policy address in Singapore, acting US Defense Secretary Patrick Shanahan warned today (June 1) China that “behavior that erodes other nations’ sovereignty and sows distrust of China’s intentions must end.”At the same time, America’s top defense official stopped short of demanding countries take sides in the US-China economic and military face-off and said that there is still a chance for the two superpowers to come to terms.“The United States does not want any country in this region to have to choose or forgo positive economic relations with any partner,” Shanahan said, adding in a veiled reference to China that “some in our region are choosing to act contrary to the principles and norms that have benefitted us all.”