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    The Week in Asia

    Published On: 16 April 2021

    Asia House Advisory takes a look at the top developments in Asia this week affecting trade, investment and public policy.

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    FRIDAY 16 APRIL

     

    Japan and US summit signals strengthening alliance

    US President Joe Biden hosted Japan’s Prime Minister Yoshihide Suga in Washington today (Friday 16 April), marking the first foreign leader to meet in-person with President Biden at the White House. The meeting signals a recalibration of US foreign policy from the isolationist stance of the Trump administration, with the Indo-Pacific region now a major priority. The two leaders are set to cover a wide-range of topics, including the deepening of economic ties; security issues, likely to include China’s increasing assertiveness in the region; COVID-19; and climate change. Discussions on a potential joint initiative involving the development of technological infrastructure across the Indo-Pacific region are also set to take place, likely focusing on the promotion of hydrogen power and fifth generation wireless technology.

     

    China releases record first quarter GDP figures

    China’s National Bureau of Statistics (NBS) published its first quarter gross domestic product (GDP) figures today, with a record 18.3 per cent growth year-on-year across the first three months of 2021. It compares to a sharp contraction of 6.8 per cent in the first quarter of 2020 during the country’s first outbreak of COVID-19. Elsewhere, industrial production increased by 14.1 per cent in March, while retail sales rose by 34.2 per cent. The figures reflect a strong recovery, although this has notably slowed following a jump in economic growth after COVID-19 was initially curbed in China. The NBS release follows Premier Li Keqiang’s announcement at the National People’s Congress in March that China is aiming for a minimum six per cent growth target across 2021. Despite being the only major economy to expand in 2020, constraints to the recovery process will likely continue to impact momentum, notably across the consumer goods and service sectors.

     

    China, Germany and France hold virtual climate summit

    Chinese President Xi Jinping joined the leaders of France and Germany for a joint virtual climate summit this week, at the invitation French President Emmanuel Macron. Beijing’s attendance will likely raise hopes that President Xi will agree to US President Joe Biden’s invite to the upcoming international climate summit, hosted in Washington later this month. The US envoy for climate, John Kerry, is currently in Shanghai to meet with Chinese counterparts in closed-door talks, aimed at easing tensions by promoting the shared interest of climate change ahead of the summit.

     

    UAE targets talent and investment in new strategy

    The United Arab Emirates cabinet has approved the adoption of a ‘Strategy for Talent Attraction and Retention’, which aims to strengthen the country’s position as a preferred destination for living, working and investing. A press statement about the cabinet meeting, held on Wednesday, indicated that the strategy forms part of an integrated national initiative, aimed at enhancing the country’s attractiveness to foreign investment and talent. The cabinet also approved an export development policy. These developments signal the country’s ongoing efforts to diversify the economy by supporting growth of the non-oil sector via greater access to international markets. It is likely that the approval of these two measures has been accelerated, given the need to bolster economic recovery mechanisms amid the pandemic.

     

    Philippines lifts moratorium on new mineral agreements

    President Rodrigo Duterte has lifted an executive order first implemented in 2012 by his predecessor, Benigno Aquino, which suspended all applications for mineral contracts across protected areas, agricultural land, and tourism and development regions. The move likely reflects ramped-up efforts by the government to bolster state revenue by encouraging new investment amid the economic impact of COVID-19. The new EO 130 order signed by Duterte on Wednesday, which lifts the suspension, will permit new mining deals, while also allowing existing contracts to be renegotiated. The ruling remains subject to compliance with the Philippine Mining Act of 1995 and other applicable laws, rules, and regulations. An acceleration of mining projects moving to the commercial extraction stage should be anticipated in the near-term.

     

    NEXT WEEK IN ASIA

    US releases semi-annual foreign exchange report: Secretary of the Treasury, Janet Yellen, is set to designate Taiwan a currency manipulator in the report; the anticipated move has caused the Taiwan dollar to drop sharply by 2 per cent.

    Washington hosts international climate summit on 22 and 23 April: US President Joe Biden has invited 40 world leaders to participate.

    Indonesia President Joko Widodo set to enact cabinet reshuffle: The move is highly anticipated following a reorganisation of government ministries; if carried out, it will mark the second reshuffle in five months.

     

    COVID-19: ASIA ROUND UP

    PHILIPPINES: The use of the Astra-Zeneca vaccine has been suspended for individuals under the age of 60 amid international concerns over its safety; lockdown measures have been relaxed across the Manila region alongside Bulacan, Rizal, Laguna and Cavite provinces

    MALAYSIA: Johor state government has announced that it will launch the ImmuPlan app, specifically aimed at Malaysians who commute to Singapore. It is set to include a COVID-19 vaccine certificate recognised by the governments of Singapore and Malaysia, enabling more efficient travel between the two countries.

    AUSTRALIA: The use of the AstraZeneca COVID-19 vaccine has been limited amid concerns over its safety, while the government has changed its policy on vaccine recommendations, now suggesting that adults under 50 should endeavour to receiver the Pfizer’s COVID-19 vaccine.

    JAPAN: The country’s COVID-19 inoculation campaign for the general population has commenced, previous efforts having solely focused on health workers; the elderly population – those over 65 years of age – will be first to receive the vaccine.

    INDIA: The highest number of COVID-19 daily death count in five months was recorded on Saturday 10 April, totalling 794, with the overall daily case figure recorded at 145,384.

    HONG KONG: The Department of Health confirmed that 12 April marked the third day with no untraceable COVID-19 infections, 13 new daily cases were reported, 11 of which had been imported; a selection of measures are set to be eased this week for individuals who have received at least one dose of a COVID-19 vaccine.

     

    These COVID-19 insights are taken from Asia House Advisory’s focused monitoring service, one of the ways in which Asia House is providing analysis on economic and public health policy measures taken by governments across Asia and the Middle East. Please reach out to Ed Ratcliffe, Head of Advisory, at ed.ratcliffe@asiahouse.co.uk for further details on this and our other advisory services.

     


    FRIDAY 9 APRIL 2021 

     

    Pham Minh Chinh elected as Prime Minister of Vietnam

    Vietnam’s 500-member National Assembly voted on Monday 5 April to elect Pham Minh Chinh as the new Prime Minister. Chinh, a former security official, already leads the Communist Party’s (CPV) Central Organization Committee, and will now move to form a cabinet in the weeks ahead. He succeeds Nguyen Xuan Phuc, who has been appointed to the largely ceremonial role of President. The result is not unexpected, following leaks during the CPV’s 13th Party Congress, held in Hanoi between 25 January – 1 February. Chinh will likely remain in power for the next five years, with his selection marking a continuation of Vietnam’s political environment. A key priority for Chinh will be to secure the economy amid the continued impact of COVID-19. Elsewhere, an increased focus on the rising tensions between Beijing and Hanoi in the South China Sea was indicated after Chinh used his first speech as PM to pledge to ‘sovereignty and territorial integrity’.

     

    Mayoral defeat for South Korea’s ruling party

    President Moon Jae-in’s ruling Democratic Party incurred heavy losses in mayoral by-elections held across two major municipalities on Thursday 8 April. Mayoral candidates Oh Se-hoon in Seoul and Park Hyung-joon in Busan, both from the opposition conservative People Power Party, secured overwhelming victories. The results, widely seen as a referendum on the administration, mark yet another blow for Moon and his party; their approval ratings declined to a record low of 32 per cent last week amid corruption scandals and policy failures. The results signal the potential for further political shifts as the country moves towards Presidential elections, slated for 9 March 2022.

     

    Japan to raise 2030 emissions-reduction target

    Japanese Prime Minister Yoshihide Suga has revised the country’s carbon reduction target to a 40 per cent cut by 2030 – a rise from the current 26 per cent reduction set in 2013. The revision comes as the government works towards a finalised 2030 target in time for the G7 summit in June. In October 2020, Suga pledged that Japan would become carbon neutral by 2050. The ramped-up approach towards its climate commitments will necessitate a compromise between the environment and industry ministries, given the latter’s more conservative approach towards climate reform. Indications of a potential increase to cuts notably come ahead of a scheduled meeting in Washington on 16 April between Prime Minister Suga and US President Joe Biden; greater cooperation between the two countries on issues including climate change are set to be addressed.

    Asia House is exploring the business and policy response to climate change in Asia through its COP26 Programme, which continues next week with a briefing from John Murton, UK COP26 envoy, on 15 April. Find out more.

     

    Indirect talks between US and Iran over revival of JCPOA nuclear deal

    Diplomatic officials from the UK, France and Germany have acted as intermediaries for the US and Iran amid ongoing talks hosted in Vienna aimed at revising the Iran nuclear deal, which former US President Donald Trump pulled out of in 2018. The discussions, which are also being attended by diplomats from China and Russia, have so far been described as constructive by the two sides. Two expert-level working groups have also been tasked with identifying measures to be taken by Iran and the US in order to fully restore the deal. A key focus of the groups will be to find ways for the US to lift sanctions on Iran and to secure Iran’s nuclear compliance amid escalating violations against conditions set in 2015 under the Joint Comprehensive Plan of Action (JCPOA). Despite the progress, an immediate breakthrough remains unlikely in the near-term, with significant pushback likely from sceptics of the deal in both countries.

     

    Indonesia doubles sovereign wealth fund target

    Indonesian President Joko Widodo has revised the target for the country’s ambitious sovereign wealth fund to US$200 billion – double the goal outlined earlier this year. The Indonesia Investment Authority, as the fund is known, is designed to attract greater foreign investment into Indonesia to develop and diversify its economy.  President Jokowi highlighted the fund’s flexible approach, saying “we give investors the freedom to choose whether to invest in the entire portfolio or to choose the thematic funds.” Pledges have already come from fund managers in Canada, Japan, the UAE and the US, the president said, adding details of plans to incentivise sustainable investment in the country. “We want to build a green economy, which produces green products, so that we can move toward green energy,” he said.

    Indonesia’s Deputy Minister for the Environment and Forestry, Alue Dohong, briefed Asia House Corporate Members last week on the country’s efforts to tackle climate change and build a greener economy. Find out more.

     

    NEXT WEEK IN ASIA

    Foreign and Defence ministers from Japan and Germany to meet on 16 April: In the first meeting of its kind, the ‘two-plus-two’ talks will focus on security issues in the Indo-Pacific region.

    Singapore central bank monetary policy review: The bi-annual meeting is set to take place on 14 April; Monetary Authority of Singapore (MAS) will also release the Q1 2021 GDP report.

    President Biden and Prime Minister Suga to meet: The leaders will meet in Washington on Friday 16 April to agree on a joint initiative across the Indo-Pacific, including plans for a US-Japan alternative to China’s Belt and Road Initiative.

     

    COVID-19: ASIA ROUND UP

    PHILIPPINES: Lockdown measures in Manila and nearby provinces have been extended by one week as of Monday 5 April amid surging infection levels and the spread of new COVID variants.

    JAPAN: A new COVID variant identified as the E484K mutation is spreading across Japan. Recent findings indicated that in March around 70 per cent of COVID patients at Tokyo Medical and Dental University Hospital had been infected by the mutation, which is known to reduce vaccine protection.

    AUSTRALIA: The EU has blocked 3.1 million doses of AstraZeneca’s COVID-19 vaccine to Australia amid a tightening of exports, marking a setback to the country’s inoculation campaign.

    SOUTH KOREA: COVID-19 vaccine deliveries from the global vaccine-sharing scheme COVAX have been delayed for a third time, further jeopardising the country’s inoculation campaign.

    HONG KONG: The Pfizer-BioNTech inoculation campaign has restarted following a two-week suspension. 11,000 vaccinations took place last Monday 30 March, the first day of resumed distribution.

    SINGAPORE: From May, Singapore will accept the International Air Transport Association mobile travel pass for pre-departure checks – the pass contains digital certificates for COVID-19 tests and vaccines.

    MALAYSIA: Brunei and Malaysia have established a Reciprocal Green Lane (RGL) to facilitate essential business and official cross-border travel.

     

    These COVID-19 insights are taken from Asia House Advisory’s focused monitoring service, one of the ways in which Asia House is providing analysis on economic and public health policy measures taken by governments across Asia and the Middle East. Please reach out to Ed Ratcliffe, Head of Advisory, at ed.ratcliffe@asiahouse.co.uk for further details on this and our other advisory services.