How Beijing is winning control of the South China Sea – Nikkei Asian Review

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.

China’s Xi reinforces warm ties with Hun Sen’s Cambodia – Nikkei Asian Review

JAKARTA — China and Cambodia reaffirmed their solid relationship during a two-day visit by Chinese President Xi Jinping to Phnom Penh, which ended on Oct. 14. Xi’s meetings with Cambodian government leaders yielded 31 agreements, including one that doubles Cambodia’s quota for rice exports to China to 200,000 tons a year. Cambodia’s rice sector has been hit by falling prices, affecting farmers and millers, and the government has been scrambling to offset the damage, which could undermine ruling party support among the country’s rural majority ahead of local elections in 2017. Cambodia’s long-serving Prime Minister Hun Sen recently visited China, where he pushed for an increase in the rice quota. “About 80% of our people are farmers,” Phay Siphan, spokesman for the Council of Ministers told the Nikkei Asian Review. “This agreement is very important to the rural economy.”

Courting China – The Edge Review

JAKARTA – Indonesia’s government hopes to double infrastructure spending in the coming year. China recently established a new regional infrastructure investment bank. “China can bring both finance and project skills to Indonesia,” said Peter McCawley, an infrastructure focused economist at Australian National University. “In the last 20 years, China has shown a truly astonishing ability to construct infrastructure investments within China.”

Shadows on the ceiling – The Edge Review

BANDAR SERI BAGAWAN — The pre-summit chat was all about the absence of Barack Obama, but when pressed, Asian governments were quick to suggest that they had bigger concerns than the embattled American President’s no-show, with an October 17 deadline for the U.S. to raise its ‘debt ceiling’ hanging over the various summit meetings held in the Brunei capital earlier this week. American lawmakers have yet to cut a deal to raise Washington’s mammoth $16.7 trillion borrowing limit, the ‘debt ceiling, ‘which is set to expire on October 17. The stand-off forced the closure of much of the U.S. government and prompted President Obama to cancel his planned visits to Brunei, Indonesia, Malaysia and the Philippines. And while the government shutdown has prompted worldwide bemusement, the looming debt crisis has left Asia’s emerging economies nervous about the unheralded knock-on effects that could come about – if the U.S. ends up defaulting on its debt. Around 60% of China’s foreign currency reserves are thought to be American assets, so Prime Minister Li Keqiang’s words to U.S. Secretary of State John Kerry – that “China is highly concerned with the United States’ debt ceiling issue,” according to a report in by the state-run China News Service – are no surprise.