Japan's ruling coalition splits, leaving Takaichi's PM bid in doubt | East Asia Tonight (Oct 10)

Key Concepts

Slush Fund Scandal: Allegations of undeclared political funds, central to the Komeito-LDP split.
LDP (Liberal Democratic Party): Japan's ruling party.
Komeito Party: Japan's junior coalition partner, backed by a Buddhist sect.
Sana Takichi: New LDP leader, aspiring to be Japan's first female Prime Minister.
T-dome Air Defense System: Taiwan's proposed homegrown air defense system.
Double 10 Day: Taiwan's National Day.
Hwasong-20 ICBM (Intercontinental Ballistic Missile): North Korea's solid-fuel missile, expected to be showcased.
AI Chip Import Controls: China's intensified restrictions on US-made artificial intelligence chips.
Rare Earth Elements: A group of 17 metallic elements critical for high-tech applications, subject to new Chinese export controls.
Net Tonnage: A measure of a ship's cargo-carrying capacity, used for calculating port fees.
SoftBank: Japanese multinational conglomerate holding company.
OpenAI: Artificial intelligence research laboratory.
ARM Holdings: British semiconductor and software design company, owned by SoftBank.
Iron Dome: Israel's mobile all-weather air defense system for short-range rockets.
Gray Zone Incursions: Military or paramilitary actions that fall below the threshold of conventional warfare.
UNRWA (United Nations Relief and Works Agency for Palestine Refugees in the Near East): A UN agency providing aid to Palestinian refugees.
Nobel Peace Prize: Prestigious international award.
Osaka Expo 2025: World's Fair hosted by Osaka, Japan.
Myakumyaku: The official mascot of the Osaka Expo 2025.

Japan's Political Upheaval: LDP-Komeito Split and Takichi's PM Bid

Japan's political landscape faces significant uncertainty following the Komeito Party's decision to withdraw from its 26-year ruling coalition with the Liberal Democratic Party (LDP). This abrupt departure, driven by a slush fund scandal, leaves the LDP in a minority position and casts doubt on Sana Takichi's bid to become the country's first female Prime Minister in an upcoming vote.

Key Details of the Split:

Duration and Impact: The 26-year partnership, formed in 1999, saw Komeito consistently hold a cabinet post, notably the Minister of Infrastructure, Land and Transport, currently held by its leader, Tetso Saitto. Nikkei Asia estimates suggest the LDP could lose 20% of single-member seats without Komeito's support.
Reasons for Withdrawal: Komeito, backed by a Buddhist sect, had previously influenced LDP policies, preventing them from becoming "too hawkish." However, Komeito has been losing seats in recent key elections, and its supporters expressed unhappiness with the LDP's handling of the political fund scandal.
Specific Scandal: The scandal involved the summary indictment of a secretary to lawmaker Koichi Haguda in August for mishandling political funds. Despite Haguda's suspension from a key post, Takichi appointed him as the party's new acting secretary general.
Komeito's Demands and Takichi's Response: Saitto demanded stricter restrictions on corporate donations and unreported funds. Takichi stated she couldn't respond immediately as she needed to consult party members, calling it a "one-sided breakup."
Opposition Opportunities: Opposition parties are looking to capitalize on the split. The Constitutional Democratic Party is considering approaching Komeito, while Saitto expressed openness to working with the Democratic Party for the People on tightening political fund handling.

Sana Takichi's Challenges and Priorities:

Vote Math: Professor Tommoiko Tanaguchi of the University of Sakuba noted that while opposition parties remain divided, Takichi is likely to secure the most votes for Prime Minister, though it will be a "close call." The abruptness of Komeito's departure surprised LDP leaders.
Policy Bargaining: Takichi's administration will likely focus on "bread and butter" and "home affairs" issues in upcoming parliamentary sessions (October and January) to build trust. Hardline issues like constitutional amendment are unlikely to be prioritized.
International Perspective: Washington is closely observing. While a potential Donald Trump administration might favor Takichi, it prioritizes strong, effective leadership.
Funding Scandal's Future: Tanaguchi believes further revelations are "highly unlikely" to topple Takichi, as national prosecutors have already investigated without tangible punishable results beyond one individual. Takichi maintains the scandal is "long over."
First 72-Hour Priorities: Takichi and her team will be intensely focused on calculating and amassing enough votes for her prime ministership. If insufficient, they must work to form a coalition with other parties, potentially including opposition members in the cabinet – an "unusual moment" and "uncharted territory" in Japanese politics.

North Korea's 80th Anniversary and Deepening China-North Korea Ties

North Korea celebrated the 80th anniversary of its ruling Workers' Party with large-scale events in Pyongyang, including an anticipated military parade. The celebrations were marked by significant diplomatic engagement, particularly with China.

Key Diplomatic Engagements:

Kim Jong-un and Li Chang Meeting: North Korean leader Kim Jong-un met Chinese Premier Li Chang, China's second-in-command and the most senior Chinese official to visit since President Xi Jinping's 2019 trip. Both leaders pledged to deepen their "long-standing relationship," with Li Chang emphasizing China's readiness to strengthen coordination on regional and international issues, and Kim Jong-un hailing their ties as a "key pillar of stability."
International Presence: Chinese President Xi Jinping sent congratulations. Other notable attendees included Vietnam's Communist Party Chief Tolam (first Vietnamese leader in nearly 20 years) and Russia's former President Dmitri Medvedev. Observers view these gatherings as an opportunity for Pyongyang to solidify its alliances.

Strategic Implications and Economic Factors:

Renewed Emphasis: CNA's Beijing correspondent Tani highlighted the "highly symbolic, highly aspirational" language used, signaling a deeper strategic commitment. This normalization of relations follows a period where ties were reportedly deteriorating due due to China's reluctance to be directly involved in the Russia-Ukraine war, where North Korea has contributed troops.
Economic Assistance: North Korea seeks continued economic development and assistance from China, its top trading partner for the past two decades. However, analysts believe China will not disregard economic sanctions against Pyongyang.
Regional Security: The alignment raises questions about the security landscape in Asia. While South Korea hopes for peace and denuclearization, analysts are pessimistic, noting China has not mentioned denuclearization since 2022. Hopes for the upcoming APEC meeting in South Korea are also low, with analysts anticipating a short visit from US President Donald Trump, prioritizing meetings with Xi Jinping and South Korean President Lie Jayong.

Anticipated Military Parade:

Hardware Showcase: Reports suggest North Korea will display its latest military hardware at a nighttime parade. Analysts specifically expect the solid-fuel Hwasong-20 ICBM, which is reportedly capable of hitting the North American mainland.
Political Message: The display of advanced weaponry like the Hwasong-20 (following the Hwasong-19) is seen as a political message to the US, indicating continued threats will lead to further advancements in North Korea's arsenal.
Symbolic Diplomacy: While the presence of Vietnamese and Laotian leaders might suggest greater diplomatic presence, analysts largely view this as political symbolism rather than genuine cooperation.
Kim Jong-un's Declaration: In a speech on Thursday, Kim Jong-un declared the country's global standing was rising and asserted that the ruling party had made "not a single mistake and error" in its 80-year history.

China-US Tech and Trade Tensions Escalate

Tensions between China and the US are intensifying across technology and trade sectors, marked by China's tightened import restrictions on US chips, reciprocal port fees, and expanded export controls on rare earth elements.

AI Chip Import Controls:

Intensified Enforcement: China has reportedly intensified enforcement of its chip import controls, mobilizing customs officers at major ports for stringent checks on semiconductor shipments. This follows instructions to major Chinese tech firms like ByteDance and Alibaba to halt new orders and testing of US-made processors, particularly Nvidia's artificial intelligence processors.
Strategic Goal: Beijing aims to reduce reliance on US technologies, curb smuggling of high-end chips that breach US export bans, and push local tech companies to win the AI race by improving product performance and manufacturing capacity.

Reciprocal Port Fees:

China's Response: China's Transport Ministry announced that, starting October 14th, US-built, owned, operated, or flagged vessels will incur an extra 400 yen (approximately $56 USD) per net tonnage per voyage when docking at Chinese ports. This is a direct retaliation to Washington's plan to charge Chinese ships $80 per net ton at their first US port of call on the same day.
US Objectives: The US initiative aims to revive its fading shipbuilding industry and curb China's dominance in the sector, both commercially and militarily. China's shipyards rolled out over 1,000 commercial vessels last year, compared to fewer than 10 from the US.
Impact Assessment: Analysts suggest China's measures may have less impact due to the significantly smaller number of US ships globally compared to China's vast fleets. However, Washington's move has "upended global shipping," with Chinese giants like Cosco facing billions in extra costs. Investors anticipate increased US efforts to build local supply chains and reduce reliance on China.

Expanded Rare Earth Export Controls:

National Security Grounds: China announced plans to add five more rare earth elements and related materials to its export control list, citing national security. These minerals are crucial for nuclear, defense, medicine, and fiber optic sectors.
Licensing Requirements: Foreign rare earth producers will now require a Chinese export license if their final product contains Chinese material or is made with Chinese equipment, mirroring US restrictions on semiconductor exports to China.
Strategic Leverage: The White House is assessing these new rules, calling them an effort to "exert control over the world's tech supply chains." Experts believe this move gives Beijing increased leverage ahead of an expected face-to-face meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea. China produces over 90% of the world's processed rare earths and rare earth magnets.
Market Reaction: The European Commission expressed concern, expecting China to act as a reliable partner. Shares of US rare earth miners jumped on Wall Street following China's announcement, reflecting the global supply chain implications.

SoftBank's AI Investment Drive:

Funding for OpenAI: SoftBank is reportedly in talks to borrow approximately $5 billion USD from global banks to fund new investments in OpenAI. This loan would be backed by shares in ARM Holdings, SoftBank's chip design company.
Aggressive AI Strategy: Founder Masayoshi Son is aggressively positioning SoftBank in the global AI race, having pledged up to $30 billion for OpenAI and acquiring ABB's robotics arm for $5.4 billion. If the loan proceeds, SoftBank's total borrowing against ARM shares would reach $18.5 billion. SoftBank shares closed down over 3.1% on the day.

Taiwan's "T-Dome" Defense Plan and Cross-Strait Tensions

Taiwanese President William Lie used his Double 10 Day speech to unveil a bold "T-dome" defense plan, aiming to bolster the island's security amidst escalating cross-strait tensions, which China promptly condemned.

President Lie's Defense and Economic Vision:

"T-dome" Air Defense System: Lie announced plans to build a homegrown T-dome air defense system to counter enemy threats, though specific details remain undisclosed. This system is intended to protect the island, differing from Israel's Iron Dome which primarily counters short-range rockets and drones, as Taiwan faces threats from intermediate and longer-range ballistic and cruise missiles.
Increased Defense Spending: He reiterated a promise to boost Taiwan's defense spending to exceed 3% of GDP next year and reach 5% by 2030, with a special budget to be proposed by year-end.
Smart Defense: The plan includes integrating high-tech and AI technologies to develop a "smart defense combat system," investing in innovative defense technologies, and collaborating with advanced military industries globally.
Warning to China: Lie called on China to renounce the use of force to change the status quo in the Taiwan Strait, emphasizing that strength is derived not only from the military but also from overall societal resilience.
Economic Focus: Beyond defense, Lie pledged to keep Taiwan's economy competitive, supporting its technology industry (semiconductors, AI, advanced manufacturing), creating jobs, expanding childcare subsidies, and improving elderly care.
Domestic Challenges: Lie's approval ratings have dipped, and he faces pressure to govern effectively and bring stability, especially with the opposition controlling parliament.

China's Strong Condemnation:

"Biggest Threat to Peace": China's Foreign Ministry swiftly hit back, stating that "independence activities" are the biggest threat to peace across the Taiwan Strait and that "seeking independence by force will only drag the island into conflict."
Opposition to US Arms Sales: Beijing also firmly opposes US arms sales to Taiwan.
Escalation of Pressure: Analysts believe Lie's speech is likely to further escalate tensions. Beijing has settled on a narrative labeling Lie as "pro-independence" and "provocative," using anything he says (short of capitulation) as an excuse to increase pressure, potentially through more gray zone incursions or missile drills. A Chinese Foreign Ministry statement in Mandarin reportedly used aggressive language, threatening to "knock heads until they bleed."

Political Hurdles for Taiwan's Defense Plan:

Parliamentary Approval: Associate Professor Chongja from the National University of Singapore highlighted that the defense budget requires negotiation with the opposition-dominated parliament (KMT), which can block or freeze funding.
Public Opinion: The ultimate arbiter is the Taiwanese public. Their willingness to invest in security systems like the T-dome will influence political parties.
Lie's Political Acumen: Despite low approval ratings, Lie's political skill will be crucial to convince the public. Local elections next year will serve as a test of his administration's direction.
Long-Term Outlook: The fate of the defense buildup beyond 2028 depends on the incoming administration's stance on the PRC. A soft stance could lead to defense cuts, while a desire to negotiate from strength might incentivize continued or increased spending. The future remains "up in the air," contingent on upcoming local, municipal, and presidential elections.

Israel-Hamas Ceasefire and Humanitarian Aid Efforts

A ceasefire between Israel and Hamas has come into effect in Gaza, paving the way for a suspension of hostilities, an Israeli military pullback, and a hostage-prisoner exchange.

Ceasefire Terms and Hostage Exchange:

IDF Withdrawal: Israel's military is set to withdraw eastward to an agreed-upon line, which would still leave the IDF in control of approximately half of Gaza.
Hostage Release: Hamas has 72 hours to free the hostages, with Israel anticipating this could happen over the weekend.
Netanyahu's Stance: Israeli Prime Minister Benjamin Netanyahu stated that Israeli forces would remain in Gaza to pressure Hamas until it disarms, while reassuring that hostages would return and pledging to expand the "circle of peace."
International Reaction: US President Donald Trump called the peace deal a "historic moment" and announced he had been invited to address Israel's parliament, departing for the Middle East on Sunday.

Massive Humanitarian Aid Operation:

UN Preparedness: The United Nations declared itself "ready to roll" with a plan to deliver vital humanitarian aid to Gaza over the first 60 days of the truce, aiming to increase supplies to hundreds of trucks daily.
Aid Priorities:
- Food: Scale up provision to reach 2.1 million people needing food aid and 500,000 needing nutrition, with a focus on preventing and reverting famine. Cash will be provided to 200,000 families for basic food needs.
- Shelter: Provisions will be scaled up to help people prepare for winter.
- Health: Work will begin to restore Gaza's destroyed health system and deliver more medical supplies.
UNRWA's Role: The UNRWA called the deal a "huge relief," confirming enough food is ready to be trucked into Gaza to feed the entire population for three months.
Call for Contributions: The UN cautioned that much more aid is needed and appealed to developed countries to scale up their contributions.

Nobel Peace Prize Awarded to Maria Corina Machado

This year's Nobel Peace Prize has been awarded to Venezuelan opposition politician Maria Corina Machado.

Recognition: Machado was recognized as a "brave and committed champion of peace" for her "tireless work promoting democratic rights for the people of Venezuela and for her struggle to achieve a just and peaceful transition from dictatorship to democracy."
Background: The 58-year-old is a leader of Venezuela's democracy movement, advocating for free elections and representative government. She was the opposition's presidential candidate for the 2024 election but was blocked from running after a government crackdown on dissent, leading her to go into hiding.
Selection Process: Machado was selected from over 300 nominees. Notably, US President Donald Trump had been vocal about his desire for the award since taking office.

Osaka Expo 2025 Closes with Resounding Success

The Osaka Expo 2025 is set to close on Monday after a successful six-month run, defying initial skepticism and attracting over 24 million visitors.

Event Overview and Success Metrics:

Global Gathering: The expo brought together people and innovations from around the world to address global issues. It was Osaka's second time hosting, following its first in 1970.
Visitor Numbers: After a slow start in April, ticket sales gradually increased, with daily visitor numbers more than doubling from an initial average of 90,000 to over 200,000 on many days. Demand was so high that even with tickets, reservations for specific dates and times became difficult, with some visitors queuing the day before.
Financial Performance: Despite initial public skepticism about taxpayer money (one-third funded by the central government, one-third by Osaka, one-third by private sectors), the expo is expected to turn an operating profit of up to $184 million USD, largely driven by strong ticket sales and merchandise.
Exhibitors: Countries like the US, Singapore, and Turkmenistan, along with domestic companies such as Panasonic and Suntory, set up pavilions.

Cultural and Economic Impact:

Atmosphere: CNA's Mitch Ishida reported a vibrant atmosphere, particularly around the Grand Ring, the world's largest wooden structure, which offered panoramic views of Osaka and the Pacific.
Merchandise Popularity: Merchandise sales were exceptionally strong, with long queues at shops. The expo's mascot, Myakumyaku, initially perceived as "weird" or "gross" due to its five eyes, became "really cute" and highly popular, leading to collaborations (e.g., with Hello Kitty) and widespread use on hats and shoes.
Technological Showcase: Businesses used the expo to promote their latest technologies, including flying cars and advanced healthcare innovations.
Boost for Osaka: The expo, combined with an Osaka University professor (Dr. Shimon Sakaguchi) winning the Nobel Prize in Physiology or Medicine, has positioned Osaka as a "center of Japan."

Conclusion

This East Asia Tonight bulletin covered a range of critical developments across the region and beyond. Japan faces political instability as the LDP navigates a minority government after Komeito's withdrawal, challenging Sana Takichi's leadership. North Korea's 80th Workers' Party anniversary highlighted deepening strategic ties with China, underscored by high-level diplomatic visits and anticipated military displays. Meanwhile, China escalated its tech and trade disputes with the US through intensified chip import controls, reciprocal port fees, and expanded rare earth export restrictions. Taiwan unveiled a bold "T-dome" defense plan, drawing strong condemnation from China and facing domestic political hurdles. The Israel-Hamas ceasefire brought a glimmer of hope for humanitarian aid and hostage exchanges in Gaza, while Venezuela's Maria Corina Machado was recognized with the Nobel Peace Prize for her democratic activism. Finally, the Osaka Expo 2025 concluded as a resounding success, exceeding financial expectations and boosting the city's profile.