ASEAN leaders sign declaration on region's future | East Asia Tonight (May 26)

East Asia Tonight - Summary

Key Concepts:

• ASEAN integration and challenges (tariffs, trade uncertainties)
• Koala Lumpur Declaration (ASEAN roadmap for next 20 years)
• China's influence in Southeast Asia (Belt and Road Initiative)
• US-China rivalry and its impact on Southeast Asia
• Nippon Steel's takeover of US Steel
• South Korea's upcoming presidential election
• Trump's stance on Russia and Ukraine
• Hong Kong SMEs facing challenges due to trade disruptions

ASEAN's Future Amid Global Uncertainty

• Koala Lumpur Declaration: ASEAN leaders signed this declaration in Malaysia, outlining the bloc's roadmap for the next two decades. It builds upon the ASEAN Vision 2025, which has reportedly achieved 97% of its key pillars.
• Three Pillars: The ASEAN Vision 2025 focuses on political and security, economic community, and socio-cultural aspects.
• Economic Integration: The declaration aims to foster sustainable and inclusive growth, close the development gap, and maintain regional peace, stability, and prosperity.
• Economic Goals: ASEAN aims to become the fourth-largest economy by 2030 and create an ASEAN power grid by 2045, connecting national power grids.
• Trade Challenges: Washington's tariffs pose challenges, leading to trade uncertainties for ASEAN economies. Tariffs range from 10-49%.
• Regional Trade: ASEAN seeks to expand inter-regional trade and strengthen intra-ASEAN trade, which currently stands low at 23%.
• Malaysian Perspective: Prime Minister Anwar Ibrahim says ASEAN members agreed to boost regional trade and investment. He wrote to Trump requesting a meeting to address tariffs.
• Myanmar Engagement: Malaysia will continue speaking separately to the military government and its armed opposition groups to encourage direct talks.
• Timor-Leste's Membership: Timor-Leste is on track to be admitted as the 11th member of ASEAN. All ASEAN leaders agreed in principle to admit Timor-Leste.

China's Role and Influence

• Premier Li's Visit: Chinese Premier Li Chang visited Indonesia and Malaysia, attending the ASEAN GCC summit.
• New Policy Tools: China is considering new policy tools, including unconventional measures, in response to the "severe impact" on the international trade order.
• Indonesia Agreements: China and Indonesia signed agreements on maritime cooperation and tourism.
• Belt and Road Initiative (BRI): China's BRI has infused billions of dollars into regional infrastructure.
• Divided Perceptions: Despite the BRI, perceptions of China's influence are divided.
• Philippines Projects Stalled: Many major BRI projects in the Philippines have been abandoned due to territorial disputes in the South China Sea.
• Debt Trap Concerns: Former Supreme Court Justice Antonio Capo believes China was dangling loans for leverage on territorial disputes.
• China's Stance: China maintains that the BRI is not about debt trap diplomacy.
• Philippines Alternatives: The Philippine government is seeking funding from the United States, Japan, and European countries.

US-China Rivalry and Southeast Asia

• Twin-Track Trade Negotiation: ASEAN is likely to pursue a twin-track trade negotiation with Washington, with member countries seeking bilateral deals while the bloc speaks in a unified voice on levies.
• Wait-and-See Attitude: ASEAN countries are adopting a "wait and see" approach regarding Trump's actions on tariffs.
• Macron's Southeast Asia Tour: French President Emmanuel Macron visited Vietnam and plans to visit Indonesia and Singapore to position France and Europe as reliable partners "with no strings attached" amid the US-China rivalry.
• Vietnam Deals: France and Vietnam signed 14 deals covering nuclear energy, railways, satellites, and vaccines.
• Airbus Pact: Vietnam agreed to buy 20 Airbus planes for Vietjet.
• South China Sea: Both sides reaffirmed their commitment to freedom of navigation in the South China Sea.
• France's Goals: France aims to demonstrate its role as an Indo-Pacific power, oppose Chinese hegemony and US bullying, and secure sealanes in the South China Sea.

Business News

• Meituan's Performance: China's Meituan reported better-than-expected sales in Q1, driven by expansion outside mainland China. Adjusted net income rose 46% to 1.5 billion.
• Nippon Steel-US Steel Deal: Shares in Nippon Steel surged after Trump signaled approval of the proposed takeover of US Steel.
• Trump's U-Turn: Trump, who initially opposed the deal, now supports it, citing job creation (70,000 jobs) and strategic diplomacy.
• Partnership vs. Acquisition: Trump is framing the deal as a "planned partnership," but the details of the arrangement are unclear.
• Nippon Steel's Motivation: The takeover is a strategic necessity for Nippon Steel, aiming to become the world's third-largest steel producer.
• Sweetening the Deal: Nippon Steel had to increase its investment in US Steel's mills to $2.7 billion and offer a $4 billion new state-of-the-art mill to gain approval.
• OpenAI in South Korea: OpenAI is setting up its first office in South Korea, its third Asian branch after Tokyo and Singapore.
• Nvidia's AI Chip for China: Nvidia will reportedly launch a new, cheaper AI chipset for China due to US export restrictions.

South Korea's Election

• Tightening Race: South Korea's presidential election is one week away, with the race becoming increasingly competitive.
• Polls: A Realmeter survey shows Democratic Party candidate EJ Mong leading with 46.6% support, followed by People Power Party candidate Kimun Su at 37.6%.
• Key Pledges: EJimyong vowed pragmatic diplomacy and stronger ties with the US and Japan. Kimunu pledged to limit presidential immunity and proposed a two-term system.
• North Korea's Failed Launch: North Korea detained another official over the failed launch of a warship.

Other News

• Darwin Port: China's ambassador to Australia criticized Canberra's intention to return Darwin port to local ownership.
• Hong Kong SMEs: Hong Kong SMEs are facing challenges due to trade disruptions stemming from US tariffs.
• China Rainfall: Chinese authorities are warning of severe storms and heavy rainfall in Gujo and southern regions.
• Japan Rice Prices: Japan wants to slash rice prices to around half their current levels to combat food inflation.

Conclusion

The news segment covers a range of critical issues in East Asia, from ASEAN's efforts to navigate global economic uncertainties and China's growing influence to the US-China rivalry and its impact on regional trade. The upcoming South Korean election and business news, including the Nippon Steel-US Steel deal, further highlight the dynamic and complex landscape of the region. The segment also touches on the ongoing war in Ukraine and its global implications.