Trump says TikTok deal ‘very close’ ahead of call with Xi Jinping | East Asia Tonight (Sep 19)

Key Concepts

• US-China Relations: Trade talks, tariffs, TikTok deal, national security concerns, multipolarity vs. multilateralism.
• East Asian Security: Japan's defense strategy, China's military posture, North Korea-Russia relations, Taiwan reunification.
• China's Economy: GDP growth target, stimulus, AI investment, industrial overcapacity, equity market optimism, 5-year plan.
• Regional Economics: Southeast Asia's role in global supply chains, dollarization, cryptocurrency, Hong Kong IPOs, Bank of Japan policy.
• Geopolitics: Freedom of navigation, South China Sea tensions, Gaza conflict, German reunification model for Taiwan.

US-China Relations and TikTok Deal

• Trump-Xi Call: A highly anticipated phone call between Presidents Trump and Xi Jinping aimed at finalizing a TikTok deal and potentially addressing broader issues like tariffs.
• TikTok Drama: The call seeks to resolve the TikTok situation after Trump repeatedly postponed a ban intended to force the sale of the app's US operations.
• Madrid Agreement: Preceded by an agreement between US and Chinese trade officials in Madrid.
• Deadline Extension: Congress extended the deadline for TikTok's US asset sale to December 16, allowing more time for negotiations.
• Trump's Stance: Trump claims a deal is "very close" and asserts the US has the power to approve it. He views the investors as "the greatest investors in the world."
• Tariffs: The potential conversation marks the second call between the leaders since the Trump administration imposed significant tariffs on China.
• Trade Truce: Trump has considered another extension to the current trade truce, which ends on November 10.
• Ryan H's Analysis (Brookings Institution):
  • TikTok as a litmus test for US-China cooperation.
  • Both systems are "mirrors of each other," with leaders setting the tone.
  • Trump used TikTok for re-election, pledging to "save TikTok" for his supporters.
  • Trump operates with fewer political constraints on China policy.
• National Security Concerns: Initially cited as the reason for the TikTok ban, these concerns seem to have diminished under the Trump administration.

Impact on TikTok Creators and Businesses

• Creators' Concerns: TikTok creators and influencers are worried about the potential ownership transfer and its impact on their income.
• Tantry Wahuni (Indonesian Streamer): Live streaming on TikTok is her "financial lifeline," and she is anxious about the platform's future.
• Fami Reido (Clothing Business Owner): Sees opportunities on TikTok with the deal, hoping to reach Muslim consumers in the US.
• White House: Extended the deadline for the deal to December 16 but provided no further details.

Japanese Defense Strategy

• Expert Panel Recommendations: A Japanese Defense Ministry panel proposes boosting defense capabilities through technology and strengthening the domestic defense sector.
• Concerns: Growing strategic cooperation among Russia, China, and North Korea.
• Capabilities: Ramping up capabilities in standoff missile defense, unmanned assets, and cross-domain operations.
• Vertical Launch Systems: Equipping submarines with vertical launch systems for standoff missiles.
• Challenges: Rising costs and manpower constraints.
• Domestic Defense Industry: Strengthening the domestic defense industry to prepare for contingencies, including increased production of drones and ammunition stockpiles.
• US Cooperation: Working with the US to expand deterrence capabilities, including joint development of defense equipment and arms transfers with other countries.
• Defense Spending: Maintaining defense spending at 2% of Japan's GDP.
• 5-Year Defense Buildup Roadmap: Aligning security capabilities with the 5-year defense buildup roadmap through fiscal year 2027.

North Korea-Russia Relations

• Think Tank Report (Friedrich Norman Foundation for Freedom): Signs of an unequal partnership between North Korea and Russia.
• Weapons and Troops: North Korea sent $10 billion worth of weapons and troops to Russia since 2023.
• Compensation: Pyongyang received only $1.2 billion in return, mainly in food and oil.
• Technology Modernization: No evidence of direct Russian involvement in North Korea's technological modernization.
• Kim Jong-un's AI Drone Initiative: Kim Jong-un ordered research into the use of AI in attack drones.
• Drone Tests: State media released footage of Kim overseeing drone tests, including a drone similar to the US MQ9 Reaper.
• Drone Production: Kim called for increased drone production as a "major military activity asset."

Hong Kong IPO and Bank of Japan Policy

• Zijin Gold IPO: Zijin Gold, the overseas gold mining arm of Zijin Mining, filed for a Hong Kong listing to raise $3.2 billion.
• Share Offering: Selling 349 million shares at HKD 71.59 each, with trading set to begin on September 29.
• Gold Prices: Listing occurs amid record-high gold prices due to demand for safe-haven assets.
• Use of Proceeds: Settling the acquisition of a gold mine in Kazakhstan and upgrading existing mines.
• Bank of Japan (BOJ): Kept interest rates on hold but will start offloading funds bought as part of its monetary easing campaign.
• Interest Rate: Benchmark interest rate remains at -0.5%.
• Inflation: Inflation slowed to 2.7% in August.
• Governor Kadua: Warned that US tariffs were weighing on manufacturers' profits.
• SoftBank Layoffs: SoftBank Group will lay off nearly 20% of its Vision Fund team globally, focusing on AI in the US.

Future China Global Forum

• US-China Trade Talks: On top of the agenda, with discussions expected to cover the TikTok deal and tariffs.
• Professor Alfred Skipki (East Asian Institute, NUS):
  • A trade deal would manage expectations and facilitate investments.
  • Shift from global efficiency to regional resilience due to rising tensions.
  • Companies should manage risks by focusing on bilateral free trade agreements.
  • Potential for more dollarization with the US embracing crypto and stablecoins.
  • China is trying to cut excessive capacity in the industrial sector.
  • China needs to strengthen mechanisms to allow companies to exit the market.
• Dr. Leang Hong (Huatai Securities):
  • Equity market is pricing in the future outlook of Chinese growth.
  • Deepseek moment made investors realize the progress of innovation in China.
  • Global investors are overexposed to US assets and underexposed to China.
  • China's innovation ecosystem is young and dynamic, with "raw animal spirits."
  • Corporate governance reform is continuously improving in China.
• China's 5-Year Plan: A blueprint that is likely to chart its trajectory on social and economic goals in the near future.

China's Military Posture and Taiwan

• Xiang Shan Security Forum: China's power projection took center stage.
• Defense Minister Tongqin: Hailed Beijing's efforts to reshape global governance and stressed that the PLA would never allow Taiwan separatist attempts to succeed.
• Joe Po (Center for International Security and Strategy, Tsinghua University):
  • Neither China nor the US has specified red lines on Taiwan, but both sides have a good understanding.
  • China supports multipolarity as a path to shared security.
  • China's formula for global governance is to cooperate with other countries to address common challenges.
  • China is trying to balance safeguarding peace with a firm military posture in the South China Sea.
  • China's patience on Taiwan is running "a little bit thick" due to the Taiwanese leader's provocative actions.
  • Reunification is a "must" for China to achieve great rejuvenation.
• Freedom of Navigation: Rising tensions with the Philippines in the South China Sea.
• Gaza Conflict: A Chinua University dean challenged an Israeli delegate on Gaza, saying "you should have shot the terrorists, not the children."
• German Reunification Model: Raised as a potential model for incentivizing Taiwan.

Pakistan's Donkey Export

• Surging Demand: Surging demand from China has pushed up donkey prices in Pakistan.
• Traditional Chinese Medicine: Donkey hides are used in traditional Chinese food, medicine, and cosmetics.
• Declining Domestic Supply: China's domestic donkey supply is declining, leading to imports from countries like Pakistan.
• Donkey Farms: Officials are setting up donkey farms to revitalize Pakistan's economy.
• Concerns: Unregulated meat entering local food chains, abuse, and illegal slaughter.
• Animal Rights Experts: Want stronger safeguards to protect donkeys.
• Government Measures: Cracking down on black market dealings and regulating donkey exports.

Conclusion

The news program covers a range of critical issues in East Asia, from the high-stakes US-China relationship and the potential TikTok deal to regional security concerns involving Japan, North Korea, and China. It also delves into China's economic trajectory, the role of technology and innovation, and the implications for global trade. The program highlights the complexities of international relations, the challenges of balancing economic growth with security concerns, and the impact of these developments on businesses and individuals in the region. The discussion of Pakistan's donkey export provides a unique perspective on the economic forces at play and the ethical considerations that arise in a globalized world.