The Week in Asia

Week in Asia

The Week in Asia


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


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Friday 18 April 2019


This week, 193 million Indonesians voted in the world’s biggest single day election, the Philippines growth target was revised down and the US and Japan began trade talks.   


1. Joko Widodo set to win Indonesian presidential election

Quick count polls suggest incumbent Joko Widodo (known as Jokowi) is set for a comfortable win in the Indonesian presidential election. He is likely to receive between 54.4 per cent and 55.7 per cent of the vote, while Prabowo Subianto, his contender, getting between 43.9 per cent and 45.6 per cent. This would give Jokowi a relatively strong position to implement his policy agenda, continuing with economic reforms and pursuing international funding for infrastructure; however, the makeup of parliament is still unclear. This is good news for markets, which have already responded positively on the news, and for investors, as policy continuity under Jokowi means there is possibility for further opening up of the market. Official results for the Presidential race and parliamentary seats are expected to be released in May.


2. Philippines passes new budget; growth target down 

After months of delays due to squabbling between the upper and lower houses, the Philippines passed its largest ever budget at 4.1 trillion pesos (US$71 billion). A major driver of growth in the new budget is the huge infrastructure push, dubbed ‘Build, Build, Build’ by policymakers. The delay in passing the budget caused the Philippines to cut its growth target from to 6.7 per cent from 7.8 per cent for 2019. The outlook was also affected by uncertainty coming from the US-China trade tensions, which is impacting growth across the region. Last year, the Philippine economy grew the slowest in three years, based on weakening exports, manufacturing and agricultural output.   


3. Japan-US trade talks 

US and Japanese representatives began the first round of much-anticipated trade talks in Washington DC on Tuesday. US Trade Representative Robert Lighthizer welcomed Japanese Economic Revitalisation Minister, Toshimitsu Motegi, with the US saying it wants a temporary deal agreed in two days. Negotiations will target 22 specific areas, such as non-tariff barriers in Japan’s car market and currency, focusing on quick-win areas first. While the Americans are keen on getting tariff cuts for farm goods, the Japanese side will only agree to this if there are US concessions for Japanese industrial goods. Japan-US trade relations have been in the spotlight since President Trump’s push against the US’s large trade deficit with Japan, the world’s third largest economy, which official figures from the US Census Bureau put at US$67.6 billion for 2018. 


4. Singapore exports fall most since 2016 

Singapore’s non-oil exports fell 11.7 per cent in March, its largest slump since October 2016 and a lot worse than analysts’ expectations. The bad results were led by a 26.7 per cent year-on-year drop in electronics exports, following the sector shrinking over the past year – hit by the slowing demand for smartphones in Asia. This comes as economies in the region feel the effects of ongoing trade tensions as well as the slowing Chinese economy. In more bad news, Singapore’s first quarter economic growth of 1.3 per cent was the lowest year-on-year quarterly growth in a decade. The need to spur economic growth amid a challenging global environment will be a key focus for Singapore’s leadership in the run up to a general election, which must be held by April 2021. 


5. Media hype over China posting better Q1 results than expected 

Commentators were excited this week over China’s better-than-expected Q1 results, as it recorded growth of 6.4 per cent instead of the expected 6.3 per cent. However, this is still 0.4 per cent down from the 6.8 per cent growth a year ago. The result is probably due to Beijing’s stimulus packages, which saw industrial production surge by 8.5 per cent in March. These stimulus plans may not, however, be a sustainable way to maintain high growth. The global economic slowdown, US-China trade tensions and China’s economic transition mean China is likely to continue to see a downwards growth trajectory. 




Looking ahead to next week, here are a couple of events to watch:


Belt and Road forum in Beijing. Around 40 world leaders and delegations from 100 countries will attend China’s second Belt and Road summit in Beijing next week. Attendees are expected to announce a joint declaration at the summit, signalling stronger cooperation and a drive for sustainable economic development. Leaders attending include Russia’s Putin and Thailand’s Prayut Chan-o-cha. UK Chancellor Philip Hammond is set to attend, aiming to discuss China-British economic and financial cooperation post-Brexit.  

Pakistan Prime Minister to sign agreements with China. Pakistan’s Prime Minister Imran Khan is one of the world leaders visiting China for the Belt and Road forum in Beijing. Pakistan and China are expected to sign several agreements to enhance bilateral cooperation, although the details have not yet been released. China has already agreed around US$60 billion in infrastructure loans for Pakistan, which is a major hub along China’s Belt and Road initiative. This comes amid an economic crisis in Pakistan, despite Islamabad receiving US$10 billion in short term loans from allies including Saudi Arabia and China.  


We’re partnering with the University of Nottingham to bring you the latest analysis on the Indian elections. Read this week’s update here 


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Friday 12 April 2019


This week the US and China make further progress in trade talks, Modi makes more campaign promises and China attempts to ease European anxieties over economic relations.   


1. US and China overcome major hurdle in trade negotiations 

Both the US and China have agreed to monitoring and enforcement measures in the ongoing trade negotiations. The world’s two biggest economies agreed to establish reciprocal enforcement offices, in a sign that both sides are keen to conclude the negotiations. There is still no indication of the time-frame for a deal, but the trickle of good news coming out of negotiations suggests they are reaching their conclusion.  


2. Modi promises to spend US$1.44 trillion on infrastructure 

As part of his re-election bid, Indian Prime Minister Narendra Modi pledged to spend US$1.44 trillion on infrastructure to boost both the economy and living standards. This comes amid other populist campaign promises from Modi’s Bharatiya Janata Party – which is expected to win big in the elections – such as doubling farmers income and doubling manufacturing exports. The infrastructure investment would present huge opportunities for international companies, however, there are question marks over where the money will come from. Record numbers voted on Thursday 11 April as the national election began its first of seven voting phases. You can read a full weekly briefing on the Indian elections, prepared by experts at the University of Nottingham’s Asia Research Institute, on our website.


3. Li Keqiang tours Europe after a rise in China-EU tensions  

China’s second-highest official, Premier Li Keqiang, visited Europe this week for a five-day tour amid competing visions on the continent for future EU-China relations. At the China-EU Leaders meeting in Brussels, signed joint statement included key Chinese concessions on curbing subsidies to domestic industries and facilitating market access for foreign companies. In Croatia, the Premier attended the 16+1 meetings between China and Central/Eastern European countries. Despite reports of unease from Poland and Romania over expanding trade deficits with China, the 16+1 meeting advanced trade and investment ties under China’s Belt and Road InitiativeLi is expected to witness an MoU signing between Huawei and Croatia, after saying the two nations are opening “a diamond period” in their relations. 


4. Saudi Aramco bond debut raises $US12 billion 

In one of the most oversubscribed debt offerings in history, Saudi Aramco issued US$12 billion of bonds after it received more than US$100 billion in orders from investors. The yields on the bonds are lower than those of the Saudi Arabian government which owns Aramco. The bonds sank two days in a row after the issue was completeas oil prices dropped from a five-month high. This highlights a trend that subscriptions to highly anticipated bond deals are usually inflated by investors who are concerned on missing out on an allocation but then immediately sell off smaller allocationsThe deal does indicate, however, that investors are willing to back the Kingdom’s economic future.  


5. Australian PM calls federal election 

Australian Prime Minister Scott Morrison has called a federal election for 18 May after his party’s position in the polls increased slightly following a budget release last week. Morrison’s liberal party are trailing behind the Labour party, however there has been a rise in unconventional voting patterns. The election is not likely to affect markets and the business environment in the short term, as it has in Australia’s regional neighbours. However, there could be long-term effects on foreign investment in certain sectors as Australia has been increasingly wary of foreign interference in domestic politics and the economy.  




Looking ahead to next week, here are a couple of events to watch:


Indonesia goes to the polls. After a long election campaign, over 190 million eligible Indonesian voters will go to the polls in simultaneous elections for the President and members of the People’s Consultative Assembly. Jokowi has a reasonably comfortable lead according to the latest polls, however there are still millions of undecided voters and one public debate to go. Notably, Prabowo’s campaign has gained momentum over the last week. Results will be released progressively from 25 April, with the new President inaugurated in October. Legal challenges to the results are to be expected, especially as Prabowo is already announcing that there will be cheating in the vote counting process.  

World Bank and IMF annual Spring meetings. Starting today, the annual Spring meeting of the International Monetary Fund (IMF) and World Bank are set to conclude on Sunday 14 April. The annual meeting brings together finance ministers, central bankers, parliamentarians and representatives from business and civil society. Discussion is set to focus on how to overcome issues of global concern, including the worsening world economic outlook and ongoing trade tensions. IMF meetings have been ongoing since Monday 8 April, where the global economic outlook was downgraded, and public seminars on uncertaintyageing and governance attempted to tackle challenging economic trends.  


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Friday 5 April 2019  


This week the forecast for Asia’s growth is downgraded but prospects for a US-China trade deal are looking up.  


1. Asian Development Bank cuts growth outlook for Asia 

The Asian Development Bank’s (ADB) growth projections for Asia have been reduced in its most recent report, which states that Asia’s growth (excluding the high-income newly industrialised economies of Japan, South Korea and Brunei) is projected to drop from 6.4 per cent in 2018 to 6.2 per cent in 2019 and 6.1 per cent in 2020. Overall risks for the outlook remain tilted to the downside, as the uncertainty surrounding current trade tensions, US fiscal policy, slowing growth in advanced economies and even a disorderly Brexit could all negatively affect growth in the region. Natural disasters will continue to be one of the biggest threats to economic growth throughout Asia.  


2. Optimism surrounding latest round of US trade talks 

China’s top trade negotiator, Vice Premier Liu He, is in Washington for talks with US Trade representative Robert Lighthizer and Treasury Secretary Steve Mnuchin. Reportedly a draft agreement has been drawn up but some issues remain undecided, most likely the issues of enforcement and removing of tariffs. In a sign that the talks are reaching a conclusion, President Trump met with Liu He on Thursday evening. He said that there are no plans for a summit with President Xi Jinping just yet, however the ‘Grand Daddy’ of deals has a good chance of happening. An IMF report released on Wednesday rebutted the idea that tariffs address trade imbalances, saying instead that countries should seek to address macroeconomic issues within their own economies.  


3. ASEAN finance ministers agree to liberalise services 

As results from the national election remain uncertain, Thailand hosted a meeting of the ASEAN finance ministers this week. The ministers will sign an agreement to liberalise financial services throughout the region, although no clear timeline has been given. Thailand will liberalise its asset-management business, which will allow ASEAN investors to hold majority stakes in asset-management firms. Ministers also agreed to make electronic payments across borders easier, helping to grow an e-commerce market which has huge potential.  


4. Saudi Aramco is world’s most profitable company 

With almost double the profits of Apple and more than JP Moran Chase, Google-parent Alphabet, Facebook and Exxon Mobil combined, Saudi Aramco is revealed as the world’s most profitable company, generating US$111.1 billion in net income in 2018. The opening of its book also revealed, however, the company’s close ties to the price of oil and the Saudi state. The financial data was released in a prospectus as the company prepares to raise $US15 billion through a bond sale to help finance the planned $US69 billion purchase of a state-owned petrochemical company from the Saudi sovereign wealth fund.   


5. Japan business confidence at two-year low 

The Bank of Japan’s quarterly business survey revealed business confidence is at a two-year low, as the effects of the trade tensions and the slowdown in the Chinese economy take their toll. Concerns over rises in crude oil prices and reduced global demand also played a role. This is concerning for Japan which is struggling in the battle against its long period of deflation and faces an uncertain economic outlook. It raises concerns over the Prime Minister’s ‘Abenomics’ policy and may cause delays to planned action on fiscal reform.   




Looking ahead to next week, here are a couple of events to watch:  


India’s election begins. The first of seven phases of voting in India’s general election begins on April 11. The seven phases are spread over five and half weeks, with the last day scheduled for 19 May. Incumbent Prime Minister Modi is battling for re-election along with his Bharatiya Janata Party and its alliance partners. The parties are mainly campaigning over economic issues, with the main opposition, Congress party, promising to raise living standards by focusing on welfare programs and subsidies.  


Final Indonesian election debate. The fifth and final Indonesian election debate will be held on 13 April, and will cover crucial topics, including the economy, social welfare, the financial sector, investment and industry. The fourth debate of the election was held last weekend and saw the two contestants promote their visions for the future of governmental reform, the role of technology, international relations and defence. Jokowi flexed his muscles promoting e-government, whilst Prabowo decried what he sees as the flight of Indonesian wealth through foreign ownership of strategic industries. It is now Jokowi’s election to lose as the latest poll puts Jokowi on 55.4 per cent, while Prabowo is on 37.4 per cent. 


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Friday 29 March 2019  


This week the Thai elections were hotly contested, while China continues to navigate its relationship with the EU and US.   


1. Thai election results unclear as both sides claim right to form government 

Officials claim that Thailand’s pro-military party Palang Pracharath won the most votes in Sunday’s election, however an anti-junta coalition is claiming it has enough seats to form a government. The leading party in the coalition, the Pheu Thai Party, won 137 seats in the 500-seat lower house. They are also claiming a further 118 seats from other anti-junta parties which may help them towards a majority. However, although the pro-military Palang Pracharath won only 97 seats in the lower house, they are likely to be able to count the 250 seats in the military-appointed senate towards their Prime Ministerial pick – incumbent Gen. Prayut Chan-o-cha. Official results are only expected to be finalised in May, as the electoral commission investigates allegations of voting irregularity. This will leave plenty of time for protests and politicking over the coming weeks. 


2. Xi Jinping increases economic ties in Europe 

President Xi Jinping toured Italy, France and Monaco in a six-day trip, only two weeks after the EU announced a tougher stance on economic relations with China. Italy, which has controversially signed up to China’s Belt and Road Initiative (BRI), signed 29 deals with China, worth approximately US$2.8 billion. In a coup for France, Xi signed a US$35 billion deal with French based aircraft manufactured AirbusThis is a blow to US manufacturer Boeing as it also attempts to deal with the grounding of its best-selling jet, the 737 MAX 8. European Commission President Juncker and German Chancellor Angela Merkel joined President Macron in France to meet Xi Jinping and discuss the ‘challenges of multilateralism’. Although the European leaders refused to officially sign up to the BRI, Merkel did acknowledge that EU leaders were keen to be involved.   


3. US hails progress in trade talks with China 

According to US negotiators, China has made an unprecedented offer related to a number of issues under negotiation in current trade talks, including the controversial topic of forced technology transfer. Despite this, intellectual property and enforcement are key issues that remain unresolved. The US has also indicated that it may not lift all tariffs even if a deal is made, in order to ensure Chinese compliance. US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer are currently in Beijing for yet another round of talks, with no clear end in sight.  


4. Google-backed AI start-up eyes US$1 billion valuation  

Mobvoi, a Chinese google-backed artificial intelligence startup is close to securing funding to reach a US$1 billion valuation before its initial public offering (IPO) in China. Mobvoi is Google’s first direct investment in China after it left the country in 2010 due to strict censorship laws. Backed by Sequoia and ZhenfundMobvoi is looking to seize market share from Google’s competitors, such as Apple.  


5. Chinese Premier promises further opening up at China Development Forum   

Chinese leaders sought to assure international investors at the annual China Development Forum, which was held in Beijing on 23 – 25 March. Chinese Premier Li Keqiang assured business executives that the rights of foreign firms will be respected, and investors and companies will be able to enjoy a more open and transparent business environment in China in the future. The Vice Governor of the Central Bank said that China will keep the Yuan basically stable, based on the projected continued strong performance of the Chinese economy. This comes as Li Keqiang also promised to operationalise the recently passed foreign investment law at the annual Boao Forum for Asia 

Asia House attended the China Development forum. Read our policy submission




Looking ahead to next week, here are a couple of events to watch:


Fourth Indonesian Presidential election debate. This Sunday will see Indonesia’s fourth election debate, where Presidential candidates Jokowi and Prabowo will debate ideology, the government, international relations and defence and security. Prabowo, a retired military general, is strong on security but will have to defend his record on his affiliation with strands of radical ideology. Jokowi will need to defend his record over government reform, as well as the decision to ban radical group Hizbut Tahrir Indonesia (HIT).  

US-China trade talks in Washington next week. Following talks this week in Beijing, Chinese officials will head to Washington to continue trade talks. Liu He, China’s Vice Premier and top trade negotiator, is expected to lead the delegation, which will attempt to thrash out issues related to intellectual property rights, market access, government subsidies for state-owned enterprises, the bilateral trade imbalance and trade barriers.  


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Friday 22 March 2019  


This week we see politics continue to impact economic affairs across Asia and Europe. Thailand (finally) votes this weekend in the first Asian national election of 2019; a year that will see one billion people go to the polls across the continent. You can read our full briefing on the Thai elections here. 


1. Germany does not ban Huawei as it opens 5G auction 

Angela Merkel has resisted US pressure to ban Huawei from 5G networks as Germany begins selling off 5G-ready airwaves, although security requirements for mobile networks will be toughened. Germany has significant considerations to balance. The US has warned that it could reduce its sharing of sensitive information with Berlin if it fails to ban HuaweiGermany, however, doesn’t believe in singling out an individual company or nation. European carriers have also claimed that Germany’s 5G networks could be delayed by years if Huawei was banned, as it is already deeply embedded in phone networks.   


2. Indonesia re-thinks EU relations, trade agreement 

Indonesia is examining relations with the European Union, including the negotiations over their Comprehensive Economic Partnership Agreement, in response to an EU draft regulation that says palm oil cultivation causes excessive deforestation and its use in the EU will be brought down to zero by 2030. Whilst the EU claims the regulation is aimed at promoting sustainability in the vegetable oil sector, Indonesia claims it is a move aimed at protecting the EU’s own agriculture industry 


3. Saudi Arabia launches mega project in Riyadh  

Saudi Arabia’s King Salman launched a mega infrastructure project in the capital Riyadh, investing US$23 billion in a ‘wellness upgrade’, which includes a park, sports boulevard, green space and an arts space. There are US$15 billion worth of investment opportunities available to the private sector in residential, commercial and recreational aspects of the mega-project. This is all part of Saudi Arabia’s Vision 2030aimed at diversifying and improving competitiveness in the Kingdom.    


4. Pakistan looks to Malaysia in economic crisis  

Malaysian PM Mahathir is set to sign investment deals worth nearly US$1 billion with Pakistan, who have been seeking investment since Imran Khan took office last August in order to assist with widening current account deficit and depleting foreign reserves. While this amount pales in comparison to the US$20 billion being invested by Saudi Arabia and the US$60 billion being invested by China, it does signal warming relations between Pakistan and Malaysia. Pakistan hopes this will lead to increased economic relations with the rest of Southeast Asia, showing the nation is broadening its horizons beyond its recent dependence on China.  


5. Jokowi proposes 28 projects to China under Belt and Road Initiative   

On Wednesday Indonesia proposed 28 infrastructure projects worth US$91 billion to Chinese delegates at meetings in Bali under the Belt and Road InitiativeJokowi’s administration expects at least a few of these projects to be accepted. Indonesia is insistent that the infrastructure development must be environmentally friendly and sustainablepresenting opportunities for international companies to become involved. The timing of the proposals is interesting, as during the campaign period for polls on 17 April, Jokowi has been attacked for allowing too much foreign investment into Indonesia. However, the administration is also being attacked for lagging behind on infrastructure development – something Jokowi is obviously hoping to speed up.  




Looking ahead to next week, here are a couple of events to watch:


US Delegation will head to China for further trade talksUS Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin will resume trade talks in Beijing next week, in an attempt to end the eight-month trade war between the world’s two largest economies. With President Trump saying this week that he is happy to leave existing sanctions in place for as long as necessary, there is currently no end in sight to the ongoing tensions.  

Thailand votes. Thailand will vote on Sunday in its general election, the first since the Military coup against the Pheu Thai Party in 2014. Voters are generally voting on two issues – the economy and role of the military – however with a relatively un-even playing field the military is in pole position to retain large amounts of power. Advanced voting was held last Sunday amid claims by independent group PollWatch that it was rife with vote-buying and other irregularities. Read our briefing paper for a more in-depth look at the issues surrounding the Thai election 

If you are interested in issues surrounding Southeast Asia elections, join us on 27 March 2019 at Asia House for an event on the Indonesia elections and their impact on the political and business climate moving forward. Register your interest in attending


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Friday 15 March 2019  


This week it’s all about China again as its relationships with global and regional powers continue to play out. All eyes will soon be on Thailand however as the country goes to the polls on 24 March – you can read our briefing on the Thai elections here. 


1. China passes foreign investment law 

Delegates at China’s National People’s Congress voted to pass the Foreign Investment Law, which is aimed at levelling the playing field for local and foreign businesses in China. Coming into effect on 1 January 2020, the move is seen as a signal from China to the US in the context of their ongoing trade negotiations, especially considering the law was passed so quickly after drafting. However, it has been criticised for being too vague and failing to specifically address persistent investor concerns.  


2. EU urges tougher stance on China

The European Commission released a landmark policy paper urging European leaders to adopt a 10-point action plan in the bloc’s relationship with China, which it labelled an ‘economic competitor’ and ‘systemic rival’. The paper aims to deepen engagement with China in order to promote common interests, seek a more balanced relationship and reform its own economy to keep pace with changing economic realities. The paper comes about a month out from the China-EU summit in Brussels and indicates that the EU shares at least some of Washington’s concerns over China’s economic practices.  


3. Trump delays China summit but talks progress 

Chinese state-run press agency Xinhua reported that the US-China trade talks had made ‘important progress’. Two days of talks in Washington again saw discussion on the key issues of trade balance, technology transfer, IP protection and enforcement mechanisms. Although no specifics were announced, markets across Asia rose on the news, including the MSCI index, South Korea’s KOSPI, the Shanghai Composite Index and Japan’s Nikkei. Yet there is no end in sight for the trade talks as the leader’s summit is pushed back from its proposed date at the end of March.  


4. Hong Kong regulator imposes biggest ever fine 

The Hong Kong Securities and Future Commission has levied fines at international banks UBS, Morgan Stanley, Bank of America Merrill Lynch and Standard Chartered, totalling approximately US$100 million. The fines were linked to the IPOs of Tianhe Chemicals and China Forestry, saying the banks did not carry out adequate due diligence before the IPOs. The move is significant as it signals the regulator’s tougher stance towards allegations of fraud and misreporting. It has previously been criticised for its lack of action in a perceived attempt to attract world-class listings to Hong Kong.  


5. ASEAN gains from Trump’s Asia policy 

In new research released by ISEAS-Yusof Ishak Institute, Southeast Asia has been seen to benefit from the US policy stance towards China. Although trade tensions increase negative external risks, President Trump’s focus on Northeast Asia has spared Southeast Asia’s trade surpluses from retaliation and allowed them to increase. Benefits have also come in the form of greater US security activities in the region and the secondary benefits in tourism from the Trump-Kim summits.   




Looking ahead to next week, here are a couple of events to watch:


Italy to sign up to Belt and Road. Xi Jinping is set to sign a Memorandum of Understanding (MOU) with Italy’s Prime Minister in a visit to Rome on 22-23 March, mapping out cooperation between the two countries on China’s Belt and Road Initiative (BRI). This comes as the EU urges a tougher stance towards China, and both the EU and US are concerned that Italy – as a G7 nation – signing up to the Belt and Road Initiative will lend greater credibility to the project. Italy says, however, that its agreement with China will not undermine its relationships with the US and EU.  

Indonesia’s third election debate. 17 March is the date for the third Indonesian Presidential election debate between Jokowi-Ma’ruf Amin and Prabowo-Sandiaga, one month ahead of polls. The topics for debate include education, health, human resources, social issues and culture. Prabowo-Sandiaga are likely to attack the incumbent Jokowi over employment opportunities and the presence of foreign workers in Indonesia, a touchy subject throughout the nation. Jokowi is in a good position this week, however, as a surprise trade surplus was recorded in February.  


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Friday 8 March 2019  


This week one of the main challenger parties in the Thai election was banned, China’s Two Sessions were held and the Philippines made a risky appointment to Central Bank Governor.


1. Thai constitutional court bans Princess-linked party 

Thailand’s military-backed constitutional court banned political party Thai Raksa Chart on Thursday, dealing a blow to the Thaksin aligned opposition two weeks out from national elections. The party was banned due to its nomination of Princess Ubolratana in a move that the court deemed to violate Thai cultural and political values and norms. Thai Raksa Chart was established as an ally to the Shinawatra clan’s main party, Pheu Thai, as an insurance policy against new rules that make it difficult for any one party to gain a majority. The move intensifies simmering tensions between the ruling military junta and anti-military opposition.


2. National People’s Congress delivers China’s work report 

A state-sponsored rap video entitled ‘Two Sessions’ has celebrated the economic prowess and democratic system of China at its annual meetings of the National People’s Congress (NPC), and its top political advisory body, the Chinese People’s Political Consultative Conference. The 2019 government work report delivered by Premier Li Keqiang at the NPC gives some more realistic takeaways to consider. The Chinese government is concerned over the increasingly complex and unpredictable international environment, causing it to reduce its growth target to 6 – 6.5 per cent. Taxes will be cut, but infrastructure spending will continue, suggesting China will allow its debt to keep growing. The phrase ‘Made in China’ was also conspicuously left out of the report and all other speeches, suggesting China is abandoning the term due to the wariness it has caused in other governments.


3. New Filipino Central Bank Governor appointment sees market drop 

President Duterte has appointed former Budget Secretary Benjamin Diokno as the Governor of the central bank, Bangko Sentral ng Pilipinas. The move was a surprise, and although Diokno is an economist by trade, his experience in Duterte’s cabinet has raised concerns that the appointment is political and therefore threatens the independence of the institution. Diokno is also currently under investigation for his latest budget, which has been accused of favouring his relatives for government contracts. The Peso dropped almost one per cent against the US dollar immediately following the news and, if concerns persist, investment confidence could be affected.


4. Huawei files law suit against the US Government 

Huawei has filed a lawsuit against the US government claiming the ban on Huawei is unconstitutional. Meng Wanzhou, Chief Financial Officer, also filed a lawsuit against Canada, claiming she was unlawfully interrogated prior to her arrest. Although Huawei is attempting to assert its independence from the Chinese Government, China’s Foreign Minister Wang Yi has spoken out in support of the lawsuits. Continued tensions over Huawei will not help the US-China trade deal the two nations are currently attempting to conclude.


5. New Indonesia poll shows Jokowi maintaining lead ahead of Prabowo 

A new poll in Indonesia has shown that incumbent President Jokowi has cemented his lead ahead of challenger Prabowo in the country’s election race. Jokowi-Ma’ruf Amin are leading at 58 per cent while Prabowo-Sandiaga were trailing at 42 per cent. This is welcome news for international investors who hope for a continuation of Jokowi’s economic policies. Nevertheless, competition in the race is heating up, with police on high alert to prevent growing confrontation between supporters.




Looking ahead to next week, here are a couple of events to watch:


Election schedule for Indian lower house to be announced. The Indian Election Commission will announce the election schedule for the lower house, the Lok Sabha, which will determine the ruling party and Prime Minister of India for the next five years. The elections are likely to be spread across seven or eight phases, to cope with logistical difficulties. Incumbent Prime Minister Narendra Modi is already in re-election campaign mode, as his opposition scrambles to form alliances in an attempt to oust his ruling Hindu nationalist Bharatiya Janata Party.

South-Korean President to visit ASEAN. After announcing South Korea’s New Southern Policy, President Moon Jae-in will visit Cambodia, Malaysia and Brunei next week. The trip will look to strengthen ties between South Korea and ASEAN in science and technology, information and communications technology, transport, energy and defence.


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Friday 1 March 2019


This week, the US made progress with China on trade but failed to strike a deal with North Korea, while mergers in Thailand and Indonesia highlight the region’s increasingly competitive financial sector.


1. US suspends 1 March deadline for China tariff hikes

The US has suspended the scheduled tariff increases against China until further notice. This is a positive sign in a negotiation process that has worried investors and financial markets for months. There are, however, mixed signals as to the substantive progress of the talks, with President Trump saying the two sides are “very, very” close to a deal, but also saying that he is willing to walk away from talks if the China deal does not meet US demands. This week the US also won a World Trade Organization (WTO) case against China, where the WTO ruled that China provides excessive government support to grain producers.


2. No US-North Korea deal; South Korean stocks down

Hopes for a US-North Korea nuclear deal went unfulfilled on Thursday as President Trump and Kim Jong-un left the negotiations in Hanoi earlier than scheduled. Talks broke down as the US would not agree to remove all sanctions against the pariah state, and North Korea would not agree to the dismantling all of its nuclear facilities. Markets fell sharply in South Korea after the news broke, with the KOSPI composite index closing 1.8 per cent down and the Won down 0.6 per cent against the US dollar.


3. Thai merger creates region’s sixth biggest bank

A merger between Thanachart and TMB will create the sixth biggest bank in Asia, in a deal worth US$4.47 billion. A non-binding agreement was signed between the two banks, who will issue new shares worth 70 per cent of the total deal. The merged entity will have assets of around US$60 billion and 10 million retail customers. The aim of the merger is to better compete with regional rivals by creating bigger economies of scale and more efficient fundraising and lending facilities.


4. Indonesian SOEs join forces to compete with e-commerce start-ups

Four Indonesian state-owned banks and one telecommunications SOE will merge their payment services in an attempt to challenge the dominance of Go-Jek and OVO in the Indonesian digital payments market. The market is worth around US$3.3 billion and has huge potential to grow given the country’s large population, high mobile phone use and low participation in traditional banking. Despite the fact it will have government backing, the SOE alliance will find it difficult to compete with Go-Jek and OVO, who have access to a large customer base from their existing platforms, are able to invest heavily in marketing and are not encumbered by the decision-making bureaucracy of SOEs.


5. Thailand enacts restrictive cyber-security law

Thailand’s military appointed parliament has passed The Cyber Security Act, which gives sweeping powers to regulators to access networks, copy information, seize devices and take control of all internet procedures in certain situations. Businesses have raised concerns over the rule of law, the privacy of personal and corporate data, as well as the law’s territorial applicability. The law covers any overseas company that collects, uses or discloses personal data of Thai subjects, thus could dissuade foreign companies from operating in Thailand.




Looking ahead to next week, here are a couple of events to watch out for:


China’s ‘Two Sessions’ will be held in Beijing. China’s two major political bodies, the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC), will meet next week. At the NPC meeting, Premier Li Keqiang will outline the Communist Party’s annual Work Report and policy priorities for the upcoming year. Last year President Xi Jinping’s removal of presidential term limits took the limelight. This year observers will be focusing on any announcements that indicate China’s policy position regarding the US-China trade tensions, slowing economic growth and financial vulnerabilities.


Australia and Indonesia to sign free trade deal. The Indonesia-Australia Comprehensive Economic Partnership Agreement will be signed next week, after months of delays due to a diplomatic freeze. Australia’s announcement that it would consider moving its Israeli embassy to Jerusalem caused friction with Indonesia and slowed progress on reaching the trade agreement. Under the deal all Indonesian goods will enter Australia tariff free and 99 per cent of Australian goods will enter Indonesia tariff free. This represents a huge step for the bilateral relationship between the two neighbours, which has not always been smooth sailing.


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Friday 22 February 2019


This week Saudi Crown Prince Mohammad bin Salman (MBS) toured Asia, China’s Greater Bay Area development plans became clearer and US-China trade talks offered a glimmer of hope.


1. Saudi Arabia increases ties throughout Asia 

Saudi Crown Prince Mohammad bin Salman (MBS) embarked on a three-nation tour of Asia this week. MBS pledged US$20 billion for investment in Pakistan, signed five agreements in India and meets with Xi Jinping on Friday, where discussions will likely focus on the strategic energy relationship and development of regional economic zones. The visit highlights Saudi Arabia’s increasing economic integration with Asia.


2. Greater Bay Area blueprint released 

The Chinese Communist Party released plans for the Greater Bay Area, an ambitious infrastructure development covering 11 cities (including Hong Kong, Macau and Shenzhen) and forming a central node in China’s economic development plans, as well as a facilitator for the Belt and Road Initiative. The plans lay out a strategic vision for each city to become a hub in a different sector, whilst also increasing infrastructure, financial and tech links between them. It aims to increase China’s productivity and economic growth, jointly expand opening up, and strengthen international economic and trade cooperation in support of the ongoing Belt and Road Initiative. Questions remain as to how the differences in legal, political and economic systems between mainland China and Hong Kong will be managed.


3. Outline of an agreement emerges from US-China talks 

Chinese officials have been in Washington this week for the ninth round of ongoing trade talks with the Trump administration. According to anonymous sources, six memorandums of understanding are being drafted on the topics of forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade. Whilst these agreements are not likely to cover much in terms of substantive issues, any agreement means the two sides can avoid the consequences of Trump’s 1 March deadline for increasing US tariffs against China.


4. Huawei risks can be ‘managed’ in the UK 

Huawei may not be banned from operating in the UK telecoms network, as the UK National Cyber Security Centre concluded there are ways to mitigate the risks posed. This is a set-back for US efforts to persuade allies to ban Chinese companies from their 5G networks, on the basis that it presents risks of Chinese espionage or cyber-attack. Germany and other European countries are currently considering the issue and may be swayed by the UK’s position.


5. Australia dashes UK hope to join CPTPP 

Australian Trade Minister Simon Birmingham put a damper on British hopes of accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Australia is one of 11 members. He said, “it’s a statement of fact that the UK is not within the Pacific,” and suggested there would be other nations in Asia-Pacific who would be ahead of the UK in the queue. Birmingham did, however, say that Australia is keen to negotiate a free trade deal with a post-Brexit UK as soon as possible.




Looking ahead to next week, here are a couple of events to watch out for:


Official talks between Malaysia and China over Belt and Road projects. Daim Zainuddin, an advisor to Malaysian Prime Minister Mahathir, will meet Chinese officials to renegotiate the terms of the deal on the US$20 billion East Coast Rail Link. According to Saifuddin Abdullah, Malaysia’s Foreign Minister, China is open to renegotiating the cost and size of the project. This shows a conciliatory attitude from China, which has experienced push-back against its Belt and Road Initiative from across the region.

Huawei case to be heard in US. On 28 February Seattle’s Western District Court will hear the case against Huawei, based on accusations it stole proprietary technology from T-Mobile. The decision will impact on the US-China trade talks, which have been ongoing this week in Washington. It is also likely to have an impact on the US attempt to pressure allies into banning Huawei from domestic 5G networks. Huawei argues the matter was already settled in a 2017 case, where T-Mobile was awarded US$4.8 million in damages.

Consultation on Chinese foreign ownership ends next week. The National People’s Congress (NPC) public consultation on a draft foreign investment law will end on 24 February. The law will cover Chinese-foreign equity joint ventures, non-equity joint ventures and wholly owned foreign companies. The NPC, widely considered a rubber stamp for Community Party decisions, will vote on the law in March. This accelerated passage through the NPC indicates China is rushing to take actions to appease the US in the ongoing trade negotiations.


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Friday 15 February 2019


This week the Thai elections took another turn and US-China tensions continued to play out as other nations pursue economic progress in an uncertain global environment.    


1. Thai Princess banned from running in election 

The excitement at Princess Ubolratana’s election nomination was short-lived, as the Election Commission disqualified her on the basis that her nomination is ‘considered hostile to the constitutional monarchy’. The constitutional court is now assessing whether the Thai Raksa Chart party that nominated her will be dissolved. Ubolratana’s disqualification is a boost to the ruling junta, as she could have proven strong opposition. Dissolution of Thai Raksa Chart would also be a boost for them, as one less Thaksin-aligned party will make it harder for the opposition to gain a majority in parliament. Elections are currently scheduled for 24 March 2019.


2. US-China trade talks offer little progress so far 

Another round of US-China trade negotiations took place in Beijing this week, with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin meeting Chinese Vice Premier Liu He. Mnuchin said the meetings were ‘productive’, however few official details have been released. There are reports that China agreed to end market distorting subsidies. This is not official, however, and there is no indication of how and when they would act on this, with the lack of clarity being a perpetual sticking point in the ongoing trade tensions. President Xi Jinping is expected to meet with US officials on Friday evening, after which further details may be released.  


3. European Parliament approves Singapore free trade deal 

The European Parliament voted through a landmark free trade agreement with Singapore, which will gradually eliminate nearly all tariffs on both goods and services over the next five years. Aside from lowering the cost of doing business and opening new opportunities for businesses on both sides, the European Union-Singapore Free Trade Agreement (EUSFTA) will allow EU firms to compete for public procurement contracts in Singapore. The UK will not see these benefits if it leaves the EU without a deal.  


4. Ant Financial acquires WorldFirst in US$700m deal  

China’s Ant Financial has agreed to acquire British payments group WorldFirst for around US$700 million, marking the biggest push by a Chinese firm into western financial services markets. Ant Financial is affiliated with the Alibaba Group and is the most valuable tech start-up in the world, worth US$150 billion. Ant Financial’s previous attempt to enter western markets failed when its acquisition of US company MoneyGram International was blocked on national security grounds, in line with a trend of US pushback against Chinese companies operating internationally.   


5. Japan’s economy rebounds to growth  

According to Japan’s Cabinet Office, GDP returned to growth in Q4 last year, with an annualised growth of 1.4 per cent. This suggests Japan’s economy is robust enough to deal with the external pressures of lower demand from both Europe and China. Two factors to watch this year on Japan’s economy are whether it can successfully transition to greater reliance on domestic consumption for growth, and if it can weather the impact of a consumption tax hike in October which will increase from eight per cent to ten per cent.




Looking ahead to next week, here are a couple of events to look out for:  


Second Indonesian presidential election debate scheduled for this weekend. Presidential incumbent Jokowi and his running mate Ma’ruf Amin will face off against challenger Prabowo and running mate Sandiaga Uno in the second of five live election debates. This round will focus on infrastructure, the environment, natural resources, food and energy. Infrastructure is an area of particular interest for foreign investors, as billions of dollars have been sought by Jokowi’s government to fund large infrastructure projects. You can read an Asia House briefing on the elections here.   


Singapore’s pre-election budget to be released. Finance Minister Heng Swee Keat will deliver the budget on 18 February. It is likely to promise a high amount of spending due to both a possible election later this year and the need to counter the effects of US-China trade tensions. Singapore must hold its next election by early 2021, however the Prime Minister has hinted it could be this year.   


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Friday 8 February 2019


This week Germany renews its push for multilateralism, the Thai elections take an interesting turn and President Trump continues to dominate the headlines.


1. German Chancellor Merkel met Japan’s Prime Minister Abe to discuss G20 priorities

Merkel visited Japan in pursuit of an alliance of multilateralists to counter both Trump’s America First approach to trade and China’s perceived pursuit of its own national interest. After advocating a ‘win-win’ approach to international relations in her Davos speech last week, Merkel spoke with Abe about prioritising free trade, climate protection and multilateralism. Emphasising the close relationship with Japan comes as the Federation of German Industries (BDI) has called on Berlin and Brussels to better deal with the challenges posed by a ‘state dominated Chinese economy’.


2. Thai princess runs in election against military

In an unprecedented royal foray into politics, Princess Ubolratana, sister of the Thai King, was announced as a Prime Ministerial candidate for the Thai Raksa Chart party, which is aligned with former Prime Minister Thaksin Shinawatra. She will run against Sudarat Keyuraphan from the Pheu Thai party, also aligned with Shinawatra, and against military junta leader Prayut Chan-o-cha, who confirmed today he was running in next month’s election with the pro-military Palang Pracharat party. This dramatically shakes up the election dynamic, which was previously seen as a contest between the Thaksin-aligned populists and the royalist-military establishment.


3. Indian central bank unexpectedly lowers rates

The Reserve Bank of India unexpectedly lowered interest rates by 25 basis points to 6.25 per cent, in an attempt to boost the slowing economy following a sharp slowdown in the inflation rate. It also changed its stance from ‘calibrated tightening’ to ‘neutral’ and revised down predicted growth rates from 7.5 per cent to 7.2 – 7.4 per cent for April – September. Lower interest rates will be welcome news for Modi, who has promised to increase spending and cut taxes to appeal to voters ahead of the election in May.


4. US-China trade deficit narrows

According to the US Department of Commerce, the US trade deficit with China fell by US$2.8 billion in November to US$35.4 billion, based on a decline in US imports of consumer goods, such as mobile phones and cars. This is likely to please President Trump, who has been vocal in his opposition to large bilateral trade deficit and can only be good news going into further trade negotiations.


5. Trump picks his nominee to lead the World Bank

President Trump has nominated his pick for the World Bank Presidency, David Malpass – Under Secretary of the Treasury for International Affairs and Trump loyalist who claimed on the eve of the Global Financial Crisis that people shouldn’t panic as “housing and debt markets are not that big a part of the US economy.” By convention, the US President’s nominee assumes the role of World Bank President, and it is expected that Malpass will reform the institution by increasing private sector involvement and reducing lending to high growth markets, such as China.




Looking ahead to next week, there are a couple of events to watch out for:


US officials head to Beijing for further trade talks. High level trade talks between the US and China will resume in Beijing next week. With the 1 March deadline looming, officials are hoping for progress so that the US does not have to follow through on its threat to raise tariffs from 10 per cent to 25 per cent on US$200 billion worth of Chinese goods.


US-North Korea Summit upcoming in next two weeks. US President Trump announced during his State of the Union address on Tuesday that he is scheduled to hold his second summit with Korean President Kim Jung-un in Vietnam towards the end of February. The two leaders first met in Singapore in June of last year, during which they agreed on a framework for future negotiations including North Korea’s progression towards “complete denuclearisation.” While North Korea has refrained from testing missiles or nuclear devices since the two leaders last met, observers remain sceptical due to the lack of a detailed agreement on what “denuclearisation” actually entails.


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Friday 1 February 2019


This week US-China trade talks restarted amid growing tensions over Huawei, and there was a win for free trade between the EU and Japan.


1. US-China trade talks resumed in Washington

According to both sides the talks held on Wednesday and Thursday this week went well. The concrete agreement coming out of the talks is that China will import five million tonnes of US soy beans, and increase imports of US agricultural products, energy products, industrial manufactured goods and service products – a concession to President Trump’s desire to reduce the trade balance between the two nations. Despite the positivity on both sides, fundamental differences over the structure of the Chinese economy, its openness to US firms and IP issues remain. Considering a draft framework for a potential agreement has not even been drawn up, a lot remains to be done before the 1 March 2019 deadline, when Trump plans to more than double punitive tariffs if an agreement is not reached.


2. US files criminal charges against Huawei and its CFO

The criminal charges brought by the US Department of Justice against Huawei, Meng Wanzhou and two Huawei affiliate companies include multiple counts of bank and wire fraud, obstruction of justice, theft of trade secrets and conspiring to violate trade sanctions against Iran. China’s Foreign Ministry has condemned the charges as ‘unfair and immoral’ and politically motivated. Although the US is hoping to keep this issue separate from the broader trade talks, as the Foreign Ministry’s comments indicate, China is likely to take them into account during the negotiations.


3. EU-Japan Economic Partnership Agreement comes into force

The landmark Economic Partnership Agreement between the EU and Japan comes into effect today, 1 February. It is the EU’s largest bilateral trade deal by market size and will create the world’s largest free trade zone. Eventually the deal will remove 99 per cent of tariffs applied by the EU to Japanese goods, and 97 per cent of tariffs applied by Japan. The EU and Japan’s commitment to strengthening rules based free trade stands in contrast to the ongoing tensions between the US and China.


4. Thailand’s opposition party picks Thaksin loyalist to run in elections

The Pheu Thai Party – which was democratically elected in 2011 and then ousted by the military coup in 2014 – has picked Sudarat Keyuraphan to run against the pro-military party, likely to be headed by current leader Prayuth Chan-ocha. Sudarat is a close ally of Thaksin Shinawatra, a long-time leading figure in Thai politics, who was overthrown by a military coup in 2006. Thaksin himself is banned by electoral law from influencing the campaign, one of a number of laws enacted by the current leaders to restrict election campaigning.


5. India releases budget; markets uncertain ahead of general election

Market uncertainty has been increasing ahead of the general election in India as investors are wary the government will overspend in its election campaign. A budget released today, Friday 1 February, has not had a large effect either way – as expected the budget included giveaways for rural India (where discontent has been rising over low agricultural incomes and unemployment) and the fiscal deficit is predicted to be an on-trend 3.4 per cent for 2019 -2020. Nevertheless, caution is likely to continue among investors who hoped for fiscal consolidation in the emerging market.




Looking ahead to next week, there are a couple of events to look out for:

Details of further US-China trade talks. Aside from the promise by China to import more from the US and vague announcements on planned Chinese reforms, little further details were released about the negotiations this week. We can expect those details to emerge next week, as well as information about future planned negotiations. The US has been invited to send a delegation to Beijing in mid-February to continue talks. President Trump has stated that any final agreement would have to be agreed by both himself and Chinese President Xi Jinping, so we can also expect a meeting between the two within the next month.


Details of the planned Trump-Kim summit. According to US Secretary of State Mike Pompeo, a Trump-Kim summit will be held in Asia at the end of February. US officials are somewhere in the region now in order to organise the summit and lay the foundations for further negotiations. Singapore, which hosted the US – North Korea summit last June, and Vietnam have both been mooted as possible locations for the second summit.


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Friday 25 January 2019


This week, evidence of the effects of the US-China trade war became clear, and regional election campaigns are shaping up.


1. Thai elections declared

Thailand’s military junta has announced that national elections will be held on 24 March 2019. It will be the first elections in eight years and will end the military rule that has been in place since the 2014 coup that took power from a Pheu Thai Party-led government. This is one month later than initially scheduled. It is still unknown when the election results will be announced, however the current government has assured investors that regulations and incentives enacted under their rule related to foreign investment will remain in place.


2. China’s slowest growth since 1990 confirmed

Data released by China’s National Bureau of Statistics this week confirmed the nation’s slowing pace of growth, at 6.6 percent growth for 2018. The cooling growth is related to China’s transition away from an export-led economy towards domestic consumption-led growth – what Beijing would refer to as a focus on quality rather than quantity and an attempt to create a modern, sustainable economy. Slowing Chinese economic growth, however, is one of the biggest risks to the global economy in 2019, as discussed at this weeks World Economic Forum meeting in Davos.


3. Priyanka Gandhi enters politics to reinvigorate India’s opposition party 

Priyanka Gandhi – whose father, grandmother and great-grandfather were all Prime Ministers of India – was appointed the Congress Party General Secretary in charge of eastern Uttar Pradesh, widely considered India’s most politically important state. Gandhi’s brother, Rahul Gandhi, is Prime Minister Modi’s main opposition for the upcoming elections, likely to be held in May. Priyanka Gandhi’s appointment is seen as a move by the Congress party to attempt to inject momentum into the party ahead of the elections, after it suffered an emphatic loss in 2014.


4. South Korean economic growth slows

Despite beating expectations in the fourth quarter, South Korea’s economic growth for 2018 was recorded at 2.7 per cent, the slowest growth for six years. This reflected both the global economic slowdown and South Korea’s exposure to China, which is being impacted by the ongoing US-China trade tensions. Due to this, the outlook for next year doesn’t look promising as weakness in exports are expected to continue.


5. ASEAN Secretary-General visits the UK and confirms importance of post-Brexit relationship

ASEAN Secretary-General Dato Lim Jock Hoi’s two-day visit to the UK resulted in a confirmation of the strong commitment of both sides to forming a stronger relationship. Future co-operation is likely to focus on key sectors, including fintech, green finance, the development of smart cities, cyber security, education and defence. UK investment throughout Southeast Asia exceeds investment in India and China and its importance is increasing as Britain looks towards post-Brexit opportunities. Cooperation between the EU and Southeast Asia also ramped up this week, as EU Trade Committee MEPs gave the green light to progress with the EU-Singapore free trade agreement.




Looking ahead to next week, there are a couple of events to look out for:


A Chinese delegation will visit the US for trade talks, after Vice-Premier Liu He accepts an invitation to visit Washington. He is expected to meet US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. It is hoped the talks will lead to a breakthrough in the US-China Trade War, which has been in a state of temporary truce since the G20 summit in December last year.


The official blueprint for China’s ‘Greater Bay Area’ is due to be released soon. China’s plan is for the development to become an innovation and technology hub to rival Silicon Valley. The ambitious project forms one of the main centres of China’s infrastructure and economic development plans and includes Hong Kong, Macau and Guangdong. It is also likely to have a large impact on the relationship between Hong Kong and China, as Hong Kong is integrated further into China’s mainland economy.


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Friday 18 January 2019


This week saw domestic and international tensions continue to play out across Asia.


  1. Indonesia presidential debates

The first of five live Indonesia presidential debates between incumbent Jokowi, his running mate Ma’ruf Amin, and third time challenger Prabowo and his running mate Sandiaga Uno took place on Thursday evening (17 January). The candidates debated over issues related to law, human rights, corruption and terrorism – all hot button issues in the populous democracy still attempting to rid itself of corruption, radicalism and create meaningful equality. The candidates are vying for the votes of approximately 10-15 per cent of the population that are undecided. So far it hasn’t impacted the polls much, where Jokowi remains in the lead with the most recent surveys giving him 47.7-54.9 per cent of the votes, and Prabowo getting 30.6-35.5 per cent.


  1. Thai elections postponed by a month

Thailand’s military junta has postponed scheduled elections again, saying the move is necessary so elections do not clash with preparations for the coronation of the new King, Maha Vajiralongkorn, in May. There was no objection from the two largest opposition political parties, but the pro-election movement is still calling on the government to issue a Royal Decree on the election, which would confirm it is going ahead. The junta had last month lifted a ban on political activities, allowing political parties to campaign. The postponed date is still to be confirmed, however the ruling junta prefers 24 March.


  1. China’s Vice-Premier to visit US following preparation talks in Beijing

China’s Commerce Ministry announced that Vice-Premier and ‘economic tsar’ Liu He will visit the US at the end of January for another round of trade negotiations with the Trump administration, most likely with US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin. Last week lower level negotiations were held in Beijing, the first talks since the temporary truce announced at the G20 summit in December. Discussions ran over an extended three-day period, indicating that talks went well, however nothing concrete has been announced. The US is still seeking large-scale structural changes in China’s economy, so prospects for a breakthrough remain muted.


  1. Asian governments prepare for Brexit

After Theresa May’s Brexit deal was decisively voted down in the UK parliament, reactions from Asian governments highlight the risks and opportunities in Brexit. Japan, which has billions invested in the UK through more than 1,000 companies, said that it would support its companies in order to minimise the impact of Brexit. South Korea, who has a FTA with the EU, will continue to look into the possibility of a similar arrangement with the UK. Similarly, Australian companies have taken Brexit contingency measures and the government is looking to set up a trade working group for free trade discussions with the UK.


  1. Huawei faces increased resistance in the West

Following tensions arising from the arrest of Huawei CFO Meng Wanzhou in Vancouver last month, Chinese ambassador to Canada warned there would be ‘repercussions’ if Huawei was banned from Canada. The US has been pressuring allies to halt contracts with Huawei amid allegations of spying and corporate espionage. A number of countries have done so, with Germany just announcing that they are considering a ban.





Looking ahead to next week, there are a couple of events to watch out for:


The World Economic Forum’s annual meeting takes place between 22 and 25 January in Davos, Switzerland. Trump, who stole the headlines at last year’s event, has cancelled US participation due to the Government’s partial shut-down. Theresa May has also cancelled her trip due to Brexit negotiations and Emmanuel Macron is staying in Paris to deal with the ‘yellow vest’ protesters. Nevertheless, discussions on free trade, global growth slowdown and trade tensions are likely to dominate discussions.


High level Malaysia and Singapore ministers will meet over airspace and maritime tensions.  Tensions rose between the two nations at the beginning of this week over airspace management and territorial water disputes. However, Malaysia’s Foreign Minister said communication with Singapore remained open and discussions over the issues are ongoing. Simmering tensions over the issues escalated in December, but officials insist relations are ‘still good’.


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