China attacks foreign spy agencies for “stealing” rare earths | East Asia Tonight (Jul 18)

Key Concepts

• Trade Talks: Negotiations between Japan and the US regarding tariffs and market access.
• Upper House Election: A key election in Japan that could determine the future of Prime Minister Ishiba's administration.
• Rare Earths: Critical minerals used in various industries, with China being a major producer.
• Corporate Governance Reform: Efforts to improve the management and accountability of Japanese companies.
• AI in Traditional Arts: The use of artificial intelligence to preserve and revitalize traditional crafts.
• Tariffs: Taxes imposed on imported goods, particularly between Japan and the US.
• LDP (Liberal Democratic Party): The ruling party in Japan.
• BOJ (Bank of Japan): Japan's central bank.
• GDP (Gross Domestic Product): A measure of a country's economic output.

Japan-US Trade Talks and Tariff Deadline

• Japanese Prime Minister Shigerro Ishiba met with US Treasury Secretary Scott Bessant to push for continued trade talks actively before the August 1st tariff deadline.
• Tokyo's top trade negotiator, Rio Akazawa, is also working to break the impasse with Washington, following a phone call with US Commerce Secretary Howard Lutnik.
• President Trump has stressed that the 25% tariff on Japanese imports will likely remain in place.
• The US is calling for Japan to open its domestic market for rice and other agricultural goods as a prerequisite for further talks.
• Japan is pushing for the complete withdrawal of auto tariffs, but the US has refused to make concessions on this front.
• US tariffs are hurting Japan's auto sector. Car exports to the US fell by 24.7% in May and 26.7% in June.
• If reciprocal tariffs on other Japanese goods go into effect from August 1st, the Nuda Research Institute calculates it could contract Japan's GDP by 0.85%.
• William Pessik, columnist and author of Japaneseization, stated that Japan signed a free trade agreement with the US 6 years ago and is frustrated that Trump wants another one.
• Pessik also mentioned that the reason Japanese don't buy US cars is because Japanese roads are tiny and US cars are huge.

Japanese Upper House Election

• Voters are heading to the polls in an election seen as a key test for Prime Minister Ishiba.
• The LDP's poll rating is at its lowest since 2012, and surveys suggest the coalition is expected to lose its upper house majority.
• A loss in the upper house could make it harder for the government to take difficult long-term decisions and could force Ishiba to step down.
• Analysts say opposition groups are too fractured to be seen as a viable alternative.
• Ishiba has set a "must-attain" goal of winning a simple majority, needing to win 50 seats out of the 125 up for election.
• Voters' concerns include soaring prices and stagnant wages, with rice prices nearly double what they were a year ago.
• The government has promised a handout of 20,000 yen per person (around $135 USD) to ease the pain.
• CNA's Mitesha reported that the latest survey suggests the ruling coalition will win less than 40 seats.
• The Democratic Party for the People (DPP), a party of moderate conservatives and liberals formed in 2020, may win 15 or more seats.
• Sanseito, a right-wing populist party formed in 2020, is predicted to gain about 15 seats.
• If the ruling coalition fails to retain the majority in the upper house, Ishiba will be under pressure to step down, potentially leading to an LDP presidential election.
• Agriculture Minister Shinjiro Koisami, who pushed out reserved rice, has a chance to win the election.

China's Rare Earths and Economic Situation

• China's Ministry of State Security accuses foreign spy agencies of trying to steal rare earths and pledges to crack down on espionage.
• Foreign agents are allegedly colluding with domestic lawbreakers to steal rare earths through delivery channels, bypassing export restrictions by forging labels and routing products through third countries.
• Rare earths have been a point of focus in trade tensions between China and the US.
• China produces 70% of the world's rare earths and controls nearly 90% of global processing capacity.
• Japan and the European Union are looking at partnerships to secure their supply of rare earths and reduce their dependency on China.
• The US government signed a multi-billion dollar deal with American minerals company MP Materials to boost its own output.
• India is also holding talks with Chile and Peru for their critical minerals.
• China's leaders have pledged to step up regulation of aggressive price cutting by home companies.
• The commerce ministry in Beijing has warned that the country's economy is facing a severe and complex situation.
• China's aluminium imports jumped more than 24% on year in June.
• China is reportedly threatening to block the sale of more than 40 ports owned by Hong Kong's based CK Hutcherson to Black Rock and Mediterranean shipping company if its largest shipping company Costco does not get a stake.

Market Performance and Analysis

• Japanese markets ended the day in the red due to political uncertainty ahead of Sunday's election.
• Core inflation cooled in June, coming down from an almost 30-month high as rice prices slightly.
• The Nikkei 225 ended the day down by two tenths of a percent.
• Shares of 7 and I fell further after Canada's Alimon Gush pulled its 47 billion bit to buy the Japanese convenience store giant.
• Monx Group's expert director, Jasper Core, stated that the market is concerned that more populist calls for tax cuts for fiscal irresponsibility are going to start to come through.
• Core believes that policymaking in Japan will become more uncertain, which is a negative factor.
• He also mentioned that corporate governance changes are driven by the Tokyo Stock Exchange, not politicians.
• Core suggests that investors should focus on Japanese banks and financial institutions as interest rates go up.
• Markets in the greater China region closed higher.
• The Shanghai Composite Index and Shinjang Ping Index both closed higher.
• Tech and mining shares propped up sentiment in Hong Kong, with the benchmarking index up by more than 1.3%.
• Taiwan's benchmark Tax ended today's trading session up by about 1.2% while TSMC popping up by more than 2.2%.
• Cryptocurrency prices continue to sore after the US celebrated its first major national legislation on the virtual currencies.
• US lawmakers passed a bill which sets a regulatory framework for stable coins dubbed the Genius Act.

Other East Asia News

• Taiwan's vice president says the island does not seek conflict with China and will not provoke a confrontation.
• China's education ministry has issued a safety warning for Chinese students studying in the Philippines.
• South Korean President Elijah Mong has called for the mobilization of all available resources as the country battles its third day of torrential rains.
• A tropical storm Whipper is intensifying as it draws near to the northern tip of Luzison in the Philippines.
• Parts of Japan are facing scorching heat as weather authorities issue heat stroke alerts for some prefectures.
• Malaysian Prime Minister Anoi Ibrahim says his government will give due consideration to the proposed appointment of Nick Adams as the country's next US ambassador.
• The EU has signed off on one of its strongest sanctions packages against Russia to date.
• Japanese experts have conducted training in Kev, showing trainees how to detect and clear landmines using equipment provided by Tokyo.
• Hong Kong researchers have found a way to reconstruct the human bone structure in three dimensions by using 2D X-ray images.
• The Hong Kong Polytenic University has received new project funding this year to revitalize the city's traditional art and promote digital transformation of its culture industry.
• A new K-pop boy band with two North Korean members that have made their global debut.

AI and Traditional Arts in Hong Kong

• PhD students at the Hong Kong Polytechnic University have captured a porcelain paint master's skills and techniques using generative AI.
• The technology aims to quickly trigger kids' attention and interest and reduce the tedious making process into simple, interesting steps.
• The technology allows apprentices to observe the process from different angles, instead of the traditional 2D video.
• Students have used AI to generate a digital human from the fast disappearing indigenous tanka group or ethnic community known as boat dwellers to share their history and experiences.
• Local museums are doing their part to keep the level of crafts and cultural interest alive.
• A university PhD project allows users to tour the museum virtually and be immersed in the exhibitions using VR.

Conclusion

The news segment covers a range of critical issues in East Asia, including the ongoing trade negotiations between Japan and the US, the upcoming Japanese upper house election and its potential impact on the political landscape, China's efforts to secure its rare earth resources and manage its economy, and the innovative use of AI to preserve traditional arts in Hong Kong. The segment also touches on regional tensions, weather-related disasters, and cultural developments, providing a comprehensive overview of the key events shaping the region.