Japan and Australia deepen Indo-Pacific security cooperation | East Asia Tonight (Sep 5)

Key Concepts

• Indo-Pacific security cooperation
• Two-plus-two talks (Japan and Australia)
• Joint defense drills (South Korea, Japan, US)
• China's military modernization
• Evacuation pact (Japan and Australia)
• US-Japan trade deal (auto tariffs)
• Thailand's Prime Minister election
• China-North Korea relations
• Anti-dumping duties (China on EU pork)
• Hyundai Motor plant investigation in Georgia

Japan-Australia Security Cooperation

• Main Topic: Deepening security cooperation between Japan and Australia in the Indo-Pacific region.
• Key Points:
  • Two-plus-two talks between foreign and defense ministers in Tokyo.
  • Focus on countering China's maritime activities.
  • "Geostrategic context is highly challenging" and the region is "more contested."
  • Both countries are close allies of the US and members of the Quad.
  • Closer defense ties through joint military trainings and a security pact allowing forces to operate on each other's soil.
  • Landmark $6.5 billion deal for Japan to build warships for Australia (Moami class frigates).
• Elevating Strategic Partnership:
  • More exercises, cooperation in logistics and cyber.
  • Economic security cooperation, especially in LNG and critical minerals.
  • Deepening engagement in Southeast Asia and with Pacific Islands.
  • Trilateral framework of Japan, Australia, and the US is vital.
  • Memorandum of understanding to evacuate citizens in a third country during a crisis.
• Examples:
  • Reference to the riot in New Caledonia in May last year as a potential crisis scenario.
• Japan's Defense Equipment Transfer:
  • Eased in 2014 to fit the new security environment and promote peace and security.
  • Australia initially showed interest in Japan's Soryu-class submarine but chose French submarines in 2016.
  • Mitsubishi Heavy Industries Moami class frigate chosen as part of Australia's 10-year national security plan.
• Impact on Japan's Defense Industry:
  • Historically focused on self-defense equipment and purchasing from the US.
  • Limited domestic competition and motivation for technological development.
  • Limited production led to high costs.
  • The frigate contract is historic and will be signed early next year.
  • Frigate is already under construction and expected to be operational in 2030.

South Korea, Japan, and US Joint Defense Drills

• Main Topic: Annual defense drills to be held in September by South Korea, Japan, and the United States.
• Key Points:
  • Aimed at upgrading operational capabilities against North Korea's nuclear and missile threats.
  • The annual Freedom Edge drill seeks to implement regional peace and stability and will be conducted in compliance with international law.
  • Follows China's Victory Day parade attended by Kim Jong-un.
  • South Korea and the US held a large-scale troop mobilization exercise last month, criticized by Pyongyang as proof of hostile intent.
• Inter-Korean Relations:
  • Relations have spiraled downwards under the previous South Korean leader.
  • The current South Korean leadership is trying to reach out to the North to de-escalate tensions.
  • Pyongyang has rebuffed overtures from Seoul and is not interested in talks.
• China-North Korea Relations:
  • Xi Jinping and Kim Jong-un reaffirmed their countries' close ties after their first meeting in six years.
  • Xi reassured Kim of North Korea's importance to China and that Beijing's position will not waver.
  • Kim reiterated Pyongyang's support in protecting China's sovereignty and territorial interests.
• Analyst Perspective:
  • The presence of Putin, Xi, and Kim together sent a strong message about a united anti-Western front.
  • Strategic messaging to pull Kim Jong-un closer to Xi Jinping and China.

Thailand's Prime Minister Election

• Main Topic: Election of Anutin Charnvirakul as Thailand's 32nd prime minister.
• Key Points:
  • Anutin, leader of the Bhumjaithai Party, secured a majority of votes.
  • Follows the removal of former leader Prayut Chan-o-cha due to an ethics scandal.
  • Anutin is the third candidate to be elected as prime minister in two years.
  • Expected to take office after formal appointment from the king.
  • Previously served in a coalition government before withdrawing in June.
• Political Context:
  • The People's Party pledged to support Anutin only for the prime minister's vote, not to join the government.
  • In exchange, they are getting a pledge to have snap elections within 4 months and constitutional reforms.
  • The Pheu Thai Party is ready to go into opposition.
• Challenges Facing the New Prime Minister:
  • Political crisis and chaotic political standards.
  • Ongoing border conflict with Cambodia and civil war in Myanmar.
  • Struggling economy with plunging tourism numbers.
  • Leading an interim minority government.
• Questions and Concerns:
  • Will Bhumjaithai keep its pledge to the People's Party regarding snap elections?
  • The role and influence of Thaksin Shinawatra, the founder of the Pheu Thai Party.
  • Thaksin's return to Thailand and subsequent departure to Dubai.

US-Japan Trade Deal

• Main Topic: Confirmation of the auto trade deal between the US and Japan.
• Key Points:
  • Lower tariffs for Japanese autos (15% from 27.5%) equals cheaper cars in the US.
  • Better access for American exporters.
  • President Trump signed the executive order with reduced rates retroactively applied from August 7th.
  • Tokyo will lower duties on US goods and commit $550 billion in funding for infrastructure projects in the US.
  • Japan also agreeing to increase US agricultural imports, including rice.
• Impact on Auto Industry:
  • Japanese automakers and parts suppliers cheered the signing of the pact.
  • Mazda, Nissan, Subaru, Toyota, and Honda saw their shares rising.
  • Auto parts manufacturers also logged in solid gains.
  • Korean automakers declined, with Hyundai Motor and Kia Corp falling.
• South Korea's Concerns:
  • The US-Japan trade pact is expected to hurt its auto industry.
  • Lower tariffs on Japanese automotive imports leave South Korean automakers at a disadvantage.
  • South Korean exports to the US remain subject to a higher 25% tariff.
  • South Korea is consulting with Washington but could not say when similar tariff cuts might apply.
  • Trump announced plans to lower tariffs on South Korean imports to 15% in return for Soul investing some $350 billion in US industries, but the cut has yet to take effect.

China's Trade Spat with the EU

• Main Topic: China escalating its trade spat with the EU by targeting pork imports.
• Key Points:
  • Commerce ministry has slapped preliminary anti-dumping duties of up to 62.4% on pork products.
  • A trade worth more than $2 billion a year.
  • The ministry says a probe found that EU exporters were dumping products and hurting Chinese producers.
  • Major suppliers including Spain, Denmark, and the Netherlands face tariffs of between 15 and 33%.
  • All others face the maximum penalty.
  • The move comes after the EU imposed tariffs on Chinese EVs.
  • The duties take effect from September 10th and could be adjusted before the investigation wraps up in December.

Hyundai Motor Plant Investigation in Georgia

• Main Topic: US authorities detaining workers at the Hyundai Motor plant under construction in Georgia.
• Key Points:
  • Up to 450 workers detained at the car battery factory.
  • Homeland security conducted a court-authorized enforcement operation, part of investigations into unlawful employment practices.
  • About 30 South Korean nationals were among those detained.
  • South Korea sent officials to Washington and Atlanta to handle the issue.
  • The raid is a setback for Hyundai and LG Energy Solution, whose joint venture battery plant was due to start operations by the end of the year.
  • The project is said to be one of the biggest investments in the US.
  • The operation reflects the Trump administration's sweeping immigration crackdown and its impact on businesses.
  • LGES shares dropped by around 2.3%.

Japan's Minimum Wage Hike

• Main Topic: Japan's minimum hourly wage is set to get a record bump.
• Key Points:
  • The largest increase in more than 40 years.
  • The move would reinforce the central bank's decision to keep increasing rates.
  • The new wage level will raise the minimum hourly wage by a record 6.3% to $7.56 US per hour.
  • Will gradually take effect from October.
  • About 3 million workers nationwide will get a boost in minimum pay by an average of 45 US cents per hour in the current fiscal year.
  • The hike is likely to fuel more price gains as employers pass on the rising costs to consumers.
  • Workers will have more money to spend, thus helping to reinforce the cycle of demand-led price gains long sought by the Bank of Japan.
  • Prime Minister Kishida has pledged to lift it to $10-12 during this decade.

Expert Analysis on Japan-Australia Security Cooperation

• Collective Deterrence: Diversifying defense postures and partnerships, driven by China's militarization and demands from the US for allies to step up.
• Evacuation Pact Scenarios: Potential conflicts in the South China Sea (Philippines), East China Sea (Okinawa), and across the Taiwan Strait.
• Not a Hedge Against the US: Focus on balancing China's power, North Korea's threats, and Russia's emerging presence.
• China's Show of Force: The parade displayed superficial missiles and systems meant to scare, but disinformation campaigns and gray zone tactics are the real challenges.
• Moami Deal: Demonstrates willingness to share sensitive technology and build an industry, but concerns about Japan's timeline and bureaucracy.

Other News Items

• India-Based Fraud Ring Busted: Joint investigation by Japanese and Indian authorities, aided by Microsoft, targeting Japanese residents with fake technical support scams.
• South Korea's Condolences: President Yoon Suk-yeol extended condolences to victims of the funicular railway crash in Lisbon, Portugal.
• Russia-China Gas Pipeline: Putin touted the Siberia 2 gas pipeline to China as mutually beneficial, priced on a Europe-style market formula.
• South Korean Drought: Gangneung faces a severe drought, with emergency measures and water supply cuts.
• Tropical Storm in Japan: Tropical storm Pepar made landfall in western Japan, causing heavy rain, floods, and landslides.
• Philippines Corruption Crackdown: President Marcos is set to order the creation of an independent commission to investigate corruption in flood control projects.

China's Military Modernization

• CNA Documentary "When Titans Clash": Examines how China's rapid military modernization is causing unease in some countries.
• Key Points:
  • The PLA is the biggest army in the world with over 2 million soldiers.
  • China has developed a formidable ship building industry, producing a naval fleet with over 230 warships.
  • China also builds more advanced fighter aircraft every year than the United States.
  • China's military modernization is the fastest and most ambitious in peacetime in modern history.
  • Concerns about hypersonic missiles and the capabilities of China's most modern fighter jets.
  • China has been projecting its military might more frequently and further.
  • Examples: Live fire naval drills in international waters off Australia and New Zealand, deployment of two aircraft carriers simultaneously to the Pacific near Japan's southern islands.

Conclusion

The news bulletin covers a range of significant developments in East Asia, highlighting regional security concerns, economic shifts, and political transitions. Key takeaways include the deepening security cooperation between Japan and Australia, the ongoing tensions surrounding North Korea's nuclear program, the election of a new prime minister in Thailand, and the economic implications of trade deals and disputes. The increasing military capabilities of China and its impact on regional stability are also a central theme.