Renault-Nissan Alliance overcame crisis, redefined collaboration – Asia Times

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Nissan and Honda announced integration late. The Renault-Nissan Alliance, which had existed since 1999, is often described as having come to an end by the adjacent of 2023. Popular structures, such as the simultaneously created purchasing organization, are dissolved. But, the relationship between the two companies continues ( along with the third mate, Mitsubishi ) in the form of creative projects.

How does we comprehend the alliance’s collapse while maintaining a relationship that is sustained through jobs? To explain this phenomenon, it is necessary to examine the entire dynamics of the partnership, from its roots to the problems it has undergone.

The Renault-Nissan proper empire, forged in 1999, has been a subject of extensive research, especially as it faced a big issue in 2018. The partnership’s base was shaken by the arrests of Alliance CEO Carlos Ghosn and Nissan committee member Greg Kelly on charges of tax fraud and misuse of commercial property.

However, the alliance endured, with Mitsubishi joining as a second mate. Understanding its direction – its operations pre-crisis, the tumult of the problems, and its survival – required a new lens. Through conducting extensive interviews with key partners in France and Japan, which led to the publication of our study in the journal M@n@gement.

The bases of the Renault-Nissan empire

First dubbed” The Alliance” by its members, the Renault-Nissan relationship can be assessed through proper alliance concept, which emphasises three core rules:

  • Complementarity: Alliances thrive when colleagues possess comparable features.
  • Interpersonal investment: Trust and cooperation deepen over period, fostering a smooth working relationship.
  • Learning interactions: As companies learn from each other, their mutual dependence diminishes, usually limiting the group’s duration.

Yet, the Renault-Nissan ally defied these standards. There were geographic complementarities when Renault first came out, with Nissan’s reputation in America and Asia competing favorably with Renault’s power in Europe. Operatically, Renault demonstrated exceptional project supervision but lagged in terms of quality control, while Nissan excelled in quality output but struggled with charge and project management.

However, these synergies were overshadowed by the reality that Nissan was on the brink of bankruptcy, burdened with$ 20&nbsp, billion in debt. It was Renault, no Nissan’s preferred companion Daimler-Benz, that took the risk. Complementarity is an exaggerated notion because the two businesses had little in common at the beginning.

The companies had plenty of time to learn from one another as the empire approached its 20-year milestone. However, the 2018 problems revealed a remarkable fragility. Decades of cooperation virtually instantly vanished, posing questions about the quality of their interpersonal funds. One top professional reflected:” It remains a problem for me: why are these companies but delicate”?

The Renault-Nissan strong

To fully realize the Renault-Nissan strong, we turned to other philosophical systems. We covered topics ranging from project management and personal connection theory.

While business alliances differ from individual associations, both are, ostensibly, forms of relations. Interpersonal theories show two important conclusions:

  • Relationships are ongoing, inherently “unfinished business” ( Duck, 1990 ).
  • Yet long-standing relationships can become ineffective when ahead momentum stops, so the prospect takes precedence over the past.

Current companies operate within a framework of “projectification”, in which jobs are defined by distinct priorities and fixed timeframes. Unlike connections, projects are “finished company”. The Renault-Nissan agreement was analyzed by this duality between fixed assignments and open-ended relationships.

The Alliance is seen as a “project of assignments.”

Carlos Ghos n’s framing of” the Alliance” as a new management model offers critical insight. He envisioned it as a tactical empire without a predetermined goal, neither a momentary collaboration nor a merger. Through shared jobs, this vision came to life. As a Renault manager said:” Ghos n had this genius. He focused whatever on tasks. As soon as we got out of there, stuff went wrong”.

Soon after the name, the Alliance launched a joint effort in Mexico. Interconnections were created within the construction of the job itself. ” At the beginning, we focused on determining how to work properly. Jobs were matched, with a head and a co-leader assigned to each area”, said the Renault boss.

” We were informed that Nissan had a strong emphasis on quality and strict obedience to schedule”, the manager continued. ” Their technique was known to be unforgiving. When we began working together, we assigned a Renault co-leader in acknowledgment of this. In terms of price management, Renault was more organized and drove its jobs with revenue goals. Thus, cost control was managed by Renault”.

The Renault-Nissan relationship operates as an overall, endless task sustained by fixed, goal-oriented cooperation. Its construction reflects the broader pattern of projectification but with a special bend: an “unfinished task” supported by finite, finished projects.

The 2018 problems, but, tested this concept. Conflicts arose from different objectives. The French authorities, a Renault investor, pushed for a consolidation – an ultimate finish to the empire. Nissan resisted. Compounding the burden, Renault and Nissan pursued electric car growth differently, undermining combined development.

As a Nissan director said,” Now, markets only occur on jobs. We not longer have the goal, the cause for exchanges has fully changed”.

To return, the empire returned to its basic model, emphasising collaboration on electronic vehicle projects. The emphasis on shared efforts restored speed to the larger, open-ended marriage.

The Renault-Nissan event enriches our understanding of strategic alliances and job control:

  • Complementarities can come over time: More than existing from the outset, they may grow through shared projects.
  • Relational capital is focused on the future: The strength of an alliance lies more in its shared goals than in its historical ties.
  • Projectification’s dual nature, the interplay between infinite and finite projects, can sustain complex relationships.

Interestingly, this framework may extend beyond corporate alliances to interpersonal dynamics. Couples, for example, could be seen as “projects of projects”, with their longevity dependent on shared goals and mutual perceptions of fairness.

Going back to Renault-Nissan, the Alliance has ended in its institutional form, but the relationship between Renault and Nissan continues through time-limited ( finished ) projects. The dynamics of this relationship will be fascinating to keep an eye on. Will it eventually fall apart as the two partners become more and more involved in joint projects with other automakers and their joint initiatives start to decline? Or will the two partners be able to maintain some form of collaboration through joint, concrete projects without an unfinished perspective?

Magali Ayache is the maître de conférences en sciences de gestion at CY Cergy Paris Université and Hervé Dumez is vice-président rechervhed’euram, professeur and directeur of the Centre de recherche en gestion et del’Institut interdisciplinaire del’innovation, École polytechnique, European Academy of Management ( EURAM )

This article was republished from The Conversation under a Creative Commons license. Read the original article.

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The passing of a Japanese automaking icon – Asia Times

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Osamu Suzuki, mind of Japan’s Suzuki Motor Corporation since 1978 and the driving force behind India’s Maruti Suzuki, died on December 25, 2024. Overshadowed by Toyota, the Nissan-Renault play and the increase of China’s BYD, Suzuki was yet one of the great companies of the global auto industry.

Suzuki’s business, which was founded by his parents, has grown to become the tenth-largest manufacturer in the world and the largest in India, where Maruti Suzuki’s company holds more than 40 % of the business. Akio Toyoda, president of Toyota Motor, called him the parents of mini-vehicles – the “people’s vehicle” of Japan.

In 1930, Suzuki was born in Gifu Prefecture as Osamu Matsuda. After graduating from university and working at a local bank, he married Shoko Suzuki, the princess of Michio Suzuki, the leader of Suzuki Motor Corporation. He was adopted into the community in accordance with Chinese customs, changed his name to Osamu Suzuki, and started working for the company in 1958.

Osamu Suzuki rose up the corporate ladder, becoming president in 2000, president and CEO in 1978, and top managing chairman in 1972. In 2021, he retired to become a senior consultant to the business. His brother, Toshihiro, is now president and CEO of Suzuki Motor.

Michio Suzuki founded the Suzuki Loom Works in the Pacific beach town of Hamamatsu, Shizuoka Prefecture, in 1909. He began working on small gasoline-powered passenger vehicles in 1937, a job that was halted by World War II, as he sought to diversify alongside Japan’s commercial economy.

After the battle, he turned to motorized bike and riders, changing the name of his business to Suzuki Motor Co, Ltd in 1954. The business introduced its first rider car the following month.

This story is comparable to Toyota Motor, which was founded in 1926 as Toyoda Automatic Loom Works. Toyota Motor, a 1933-founded car department, was founded in 1937.

Suzuki Motor had a lot of success creating the ultra-compact light cars known as the” Kei jidosha” ( Kei cars ) in Japanese. The Suzuki Fronte sedan, its leader, the Alto, and another passenger vehicles types have proved to be strong dealers in Japan and elsewhere.

Since its debut in 1979, The Alto has gone through nine publications. Suzuki Carry cabs, first introduced in 1961, are also common with farmers and people driving Japan’s small remote roads.

To meet laws, Kei vehicles, which include passenger cars, lighting vans and modest pickup trucks, may be no more than 3.4 meters long, 1.48 meters wide and 2.0 meters higher, and have an engine displacement of less than 660 cubic centimeters.

Suzuki Motor expanded into small cars with up to 1.8 liter of engine displacement for the highest-performance versions over the years, but Kei cars also make up the majority of its engine production and sales.

Into India

Suzuki, who was prepared to transfer Suzuki Motor elsewhere in the 1980s, was concerned that the US market might not stand up to direct competition from Toyota, Nissan, and Honda.

He jumped at the chance when an Indian group arrived in Japan looking for a business that would provide money and expertise to the country’s infant auto industry. No one else did.

In 1981, Suzuki Motor entered into a joint venture with Maruti Udyog, buying 26 % of the company from the American government. Beginning in December 1983, Suzuki began manufacturing light vehicles, and as the company expanded, it became a merged subsidiary.

Listed on the Indian stock market in 2003, Maruti Suzuki is then 54.27%-owned by Suzuki Motor.

Maruti Suzuki dominates India’s fast-growing car industry. Image: X Screengrab

Ravindra Chandra Bhargava, president of Maruti Suzuki, said in his remarks regarding his encounter with Osamu Suzuki that “without his vision and vision, his willingness to take a chance that no one else was willing to take, his deep and abiding passion for India, and his huge abilities as a teacher, the American automotive industry could not have become the powerhouse that it has become. Osamu San has improved the lives of millions of people in this nation.

Osamu Suzuki was a hands-on, penny-pinching manager who frequently visited his factories to monitor how things were going and eliminate inefficiency, even eliminating the need for unnecessary lighting and switching to less expensive paint. He made several trips to India each year, documenting the introduction of Japanese factory practices.

The severe discipline, to which many local workers were unaccustomed, eventually sparked violent worker unrest in the summer of 2012. More than 500 employees were fired, and the business persevered. Suzuki told India’s Business Today,” I don’t consider this a union-management labor issue, I term it a criminal act”.

But he also said,” From 1945, when Japan lost in World War II, until 1960, we also had labor troubles. In Japan, I also had labor issues. Each nation experiences labor difficulties in its own time, which may vary in timing.

Incidentally, while Maruti Suzuki gets all the attention, the much smaller Pak Suzuki Motors is also the largest auto company in Pakistan. It started assembling cars in Pakistan in 1982 as a joint venture with the Pakistani government.

Suzuki attempted to enter the US market through a partnership with GM, which made its first investment in the Japanese company in 1981 and increased its stake in the business to more than 20 % in 2001. However, the partnership fell apart as GM’s finances deteriorated.

In 2006, GM sold most of its stake back to Suzuki, in 2008 it sold the rest and, in 2009, it filed for bankruptcy. Suzuki stopped selling passenger cars in the US in 2012. Suzuki then turned to Volkswagen, which bought 19.9 % of the company in 2010. However, the two sides broke out, and Suzuki repurchased VW shares in 2015.

Suzuki started providing Toyota with compact cars that were rebranded and offered through Toyota dealerships the following year, leading to significant increases in unit sales. In 2-19, Toyota took a 4.9 % stake in Suzuki for 96 billion yen ( about US$ 910 million at the time ) and Suzuki buying 0.2 % of Toyota for half that amount.

The partnership continues to evolve, with coordinated marketing in Japan, India, Europe, Africa and the Middle East. The two businesses made a deal in October 2024 that Suzuki would start making battery-powered electric SUVs for Toyota in Gujarat. Suzuki also makes hybrid vehicles.

Maruti Suzuki and the State of Gujarat reached an agreement last year to establish a new auto factory that will eventually produce one million vehicles annually. The fiscal year that runs until March 2029 is when operations are expected to begin.

In order to expand the production of electric vehicles, a fourth production line is planned at the company’s current factory in Gujarat. Scheduled to start operations in the year to March 2027, it will raise the facility’s annual production capacity from 750, 000 to one million vehicles. Gujarat’s total vehicle production should eventually reach two million vehicles.

In addition to the State of Haryana, construction on a new factory is underway. Work is anticipated to begin by the end of 2025 and by the 2028 annualized capacity will reach one million vehicles. In addition, the business is looking for a location in Haryana where it can set up a new factory that will have a one million vehicle annual capacity.

Maruti Suzuki’s total production capacity should increase from the current 2.35 million vehicles per year to 4 million, almost as many as the 4.3 million passenger cars sold by all automakers in India in 2024 if all of these plans are realized and older facilities retired.

Suzuki Motor also produces passenger cars in Asia in Indonesia and Thailand, but it intends to close its factory there because the country’s sales have been hampered by intensifying Chinese competition. The business has not yet provided specifics about plans to increase its investment in Indonesia this year. Suzuki withdrew from China’s auto market in 2018 but still makes motorcycles there.

In Europe, Suzuki makes passenger cars in Hungary, where it has almost 13 % of the market. Since 1991, Suzuki has invested more than$ 2 billion in Hungary. The Hungarian Investment Promotion Agency presented Magyar Suzuki with the Investors Lifetime Achievement Award in February 2024.

Suzuki makes open all-terrain vehicles ( dune buggies ) in the US state of Georgia. Because of their small size and light weight, it’s Kei cars are fatal traps in collisions with large American passenger cars and SUVs, and they have been restricted to farms or completely prohibited in a growing number of US states.

Suzuki is almost immune to Donald Trump’s planned tariffs and fierce competition in the world’s largest auto market, thanks to its low US and China sales, and its almost zero Chinese automakers ‘ presence in India, where they are almost entirely unaffected.

For the fiscal year ending March 31, 2025, Suzuki Motor forecasts a 4.5 % increase in consolidated sales to 5.6 trillion yen ($ 35.3 billion ) and an 11.4 % increase in operating profit to 550 billion yen ($ 3.5 billion ).

In comparison, Toyota is forecasting 2 % sales growth, a 19.7 % decline in operating profit and an operating margin of 9.8 %. Suzuki is also doing better than Honda, Nissan, Mitsubishi Motors and Subaru.

In terms of sales, Suzuki Motor was the 10th-largest automaker in the world at the start of 2024, according to market research firm Focus2Move. Company data show Suzuki selling 3.0 million passenger cars, compared with 3.7 million for 9th-ranked BYD and 9.7 million for top-ranked Toyota ( including its wholly-owned subsidiary Daihatsu Motor ). Suzuki is also the world’s eighth largest maker of motorcycles.

From January to November 2024, Suzuki Motor ( including its subsidiary Maruti Suzuki ) sold 670, 000 vehicles in Japan and 2.33 million elsewhere in the world, including 1.66 million in India.

In the financial year that ended in March 2024, Maruti Suzuki held the top spot in the Indian auto market, followed by Hyundai Motor and its affiliate Kia with nearly 20 %, Tata Motors with 14 %, and Mahindra &amp, Mahindra with 11 %, according to Statista data. MG ( owned by China’s SAIC ) had 1.3 %. Volvo ( owned by China’s Geely ) and BYD had less than 0.1 % combined.

India accounts for about 6 % of global passenger car sales that year, surpassing Japan in the former category in 2023. It is the third-largest national market for motor vehicles and fourth-largest in terms of passenger car sales worldwide. It will serve as Suzuki’s primary export market for the next ten years and be its largest market.

Sources: Statista data, Asia Times chart

Road ahead

The headquarters of Suzuki Motor is still headquartered in Hamamatsu, a city with a population of nearly 800,000 and where other well-known Japanese companies reside, including Yamaha Corporation, a manufacturer of musical instruments, and Hamamatsu Photonics, an optical device manufacturer. In the nearby city of Iwata, Yamaha Motor has its head office, which includes motorcycle, outboard, and jet-propelled water scooter manufacturers.

A memorandum of understanding between Hamamatsu City and the Indian Institute of Technology Hyderabad ( IIT-Hyderabad ) &nbsp ) was signed on December 26. It included arrangements for Indians to live and work in Hamamatsu, as well as for personnel exchange in science and engineering. It is the first such agreement between an IIT and a foreign government, according to IIT-Hyderabad Director Budaraju Srinivasa Murty.

The agreement comes after Suzuki Motor’s establishment of a 100%-owned subsidiary called Next Bharat Ventures IFSC Private Limited and a$ 40 million Next Bharat Venture Fund-1 in India in 2022 and the opening of the Suzuki Innovation Center at IIT Hyderabad in 2022. Bharat, deriving from Sanskrit, is another name for India.

Next Bharat Ventures invests in start-ups in the fields of agriculture, finance, supply chains and mobility through the Fund, and supports them with professional advice, networking and feasibility studies. The goal is to solve social issues and contribute to India’s economic growth. Next Bharat and Hamamatsu City have a parallel MOU signed.

President and CEO Toshihiro Suzuki says,” There are about 1.4 billion people in India, but we have only reached about 0.4 billion people … Through this]Next Bharat Ventures], we will connect with the’ Next Billion ‘ people of India, extending beyond mobility and becoming a part of India’s future story”. Responsible for his father’s legacy, he is driving it forward with gusto.

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Dragon’s Den, Shark Tank are TV knockoffs of a Japanese original – Asia Times

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Before Dragons ‘ Den in the UK became a global hit and America’s Shark Tank turned startup pitches into mainstream entertainment, there was Manē no Tora ( Tiger of Money or Money Tigers ). This innovative television program, which was first broadcast in Japan in 2001 by Nippon Television and Sony Pictures Television, introduced the firm pitching file to an angel investor section.

Little did anyone know that Money Tigers may start a global pattern that may affect how high-growth entrepreneurship was viewed and admired all over the world. The initial sponsors announced the release of the franchise’s 50th edition in Bangladesh in February 2024. The BBC broadcast the 22nd year of Dragons ‘ Den on January 2. And US ABC-TV’s Shark Tank is in its 16th time.

Cash Tigers wasn’t really about creating thrilling television. Its development was a result of a wider effort by the government and society to enhance Japan’s economic tradition. Against the landscape of a typically risk-averse community and an economy dominated by big corporations, Money Tigers aimed to adjust and actually glamorize innovation.

A wider range of government efforts were put in place to encourage innovation, increase innovative activity, and establish Japan as a world leader in technology and startups. The show was a result of what my partner Ramon Pacheco Pardo and I refer to as” business capitalism,” an era in which businesses have been key players in market economies ‘ ability to compete.

The origins of Money Tigers

In the late 1990s and early 2000s, Japan was at an economical juncture. The early 1990s boom had caused a protracted period of prolonged economic stagnation known as the” Lost Decade.”

Politicians recognised the need to expand the economy, create work, and encourage creativity. Startups, with their potential for dexterity and imagination, as well as their ability to create work for talented younger persons, became a focal point of this change. As Chinese companies competed in world markets, startups also had the ability to infuse creative concepts and talent into their operations.

Policy initiatives including tax incentives for company investments, a shift to regulations that allowed “pension account accessibility” and an entry of American-style employee stock options were among efforts to help entrepreneurs.

However, it was impossible to change a culture that stifled risk-taking and a regulatory setting that punished job mobility immediately. SoftBank’s Masayoshi Son was becoming associated with this innovative type of loud, risky business. And, while a warrior to some, Masa ( as he is now internationally known ) was controversial. He challenged Japan’s economic society and the way enterprise was conducted.

How could people coverage encourage a new generation of risk-takers who are willing to accept the unknowns of starting a business? And how could starting a business get someone a major Asian student may discuss with their families without getting criticized?

Provide Money Tigers. The show, which was a bold experiment, aimed to provide business meetings and conversations between family and friends across Japan.

Its structure was straightforward but strong: aspiring businesspeople presented their business tips to a section of rich angel investors, or “tigers,” who had the authority to finance these thoughts in exchange for equity. The drama of negotiation, the tension of rejection, and the triumph of securing an investment made for compelling viewing.

Money Tigers ‘ unique ability to humanize the entrepreneurial journey was its strength. Viewers witnessed ordinary people making daring decisions to realize their aspirations. The tigers, seated on the other side of a table, represented a mix of skepticism, curiosity and mentorship. Their enlightening inquiries and honest comments not only added drama, but they also provided information on what makes a business viable.

Money Tigers was the first instance of pitching for investment, according to many Japanese viewers. Terms like “equity”, “valuation” and “return on investment” entered mainstream conversation. Building a business with ambitious growth plans, which was once criticized as being too focused on making money, was done in a more endearing manner.

The show began to remove the stigma associated with failure and the ambitious founder by showcasing both the successes and failures of entrepreneurs. Entrepreneurs who left with nothing were frequently praised for their bravery, a message that was especially relevant to younger generations.

The show complemented policy initiatives. Between 1997 and 2001, the Japanese government launched a litany of policy initiatives, including tax incentives for angel investors and the establishment of the startup-friendly stock exchanges. Money Tigers addressed the more difficult cultural context, which was where these government policies created the framework for startups to flourish.

Innovative entrepreneurship has become more prevalent in Japan, despite being still modest in comparison to the size of the Japanese economy. Some of the world’s most well-known venture capital firms have established outposts in Japan, and the nation currently has several startups worth more than US$ 1 billion (unicorns ).

The global legacy

Money Tigers had only a few seasons in Japan ( it stopped running in 2003 ), but its impact was significant. The format was later changed to Shark Tank in the US and then Dragons ‘ Den in the UK in 2005. As of February 2024, “almost US$ 1 billion in investments has been agreed in Dens and Tanks across the globe since the format started,” according to Nippon TV and Sony.

Being an island rather than a leader, the early 2000s were a time of flimsy government initiatives to prevent Japan’s technological advancements from becoming a” Galapagos Syndrome,” which was remarkable but distinct. There was a sense that Japan was developing state-of-the-art technologies, but global consumer markets were not necessarily picking up the innovations.

Ironically, Japan was developing an export that would be a huge hit abroad without being widely known as the same time it was pushing for normalization of entrepreneurship and equity investment through a endearing TV program for its Japanese audience.

Audiences in the UK and US assumed that Dragons ‘ Den and Shark Tank were natural products of their entrepreneur-rich ecosystems. However, they were an adaptation of a state-supported, purposeful effort to change Japanese culture rather than a natural product of their markets.

Robyn Klingler-Vidra is King’s College London’s associate dean for global engagement and associate professor of entrepreneurship and sustainability.

This article was republished from The Conversation under a Creative Commons license. Read the original article.

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Proposed Honda-Nissan merger could change auto industry landscape – Asia Times

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Honda and Nissan are expected to begin negotiations on a consolidation next year, which will mark a turning point for the Japanese automobile industry. The two organizations, both of which have been overtaken by BYD and which, combined, buy fewer than three-quarters as some vehicles as Toyota, wish to step a healing by combining their technologies and achieving greater economies of scale.

However, the strategy appears to be a tribute to Japan Inc’s reduction of twilight business in the past and a knee-jerk nationalist response to Foxconn’s desire to acquire a stake in Nissan, or even to take over it. Foxconn is the global manufacturer of Taiwan’s Hon Hai Precision Industry.

The investment market’s decision came quickly and clearly. The proposed merger was headline news on the morning of Wednesday, December 18, by the time the market closed, Honda’s stock price was down 3 %, while Nissan’s was up 24 %. Put into words, this is a loan: a fortune for Nissan, terrible news for Honda’s owners. The stock price of Renault, which owns 17.0 % of Nissan directly and 18.7 % through a trust, was up 5 %. Hon Hai’s was down 1 %.

Toyota, Tesla, and BYD have all fallen way behind Honda and Nissan, both of whom were market leaders in the past, in the market for electric and hybrid vehicles. According to information for the three weeks to September, BYD is the sixth-largest manufacturer in terms of vehicle sales, trailing only Honda and Ford. Perhaps even more humiliating, Chinese automaker Geely ( which owns Volvo ) overtook Nissan to rank ninth.

Of program, the consolidation is pitched as forth looking. The two businesses will discuss a merger, according to NikkeiAsia, the English-language type of Japan’s major business regularly,” to better engage against Tesla and Chinese electric vehicle makers in a rapidly changing automotive industry.” According to The Financial Times, Nikkei owns the two businesses, “are in exploratory discussions about a merger of the two carmakers that would create a$ 52 billion Japanese behemoth.”

However, the Japanese language Nikkei’s title for Thursday morning read,” Hon Hai order, sense of problems.” Honda, which had begun discussing a” proper relationship” with Nissan next March, said it would withdraw if Nissan tied up with Hon Hai.

Hon Hai is expanding its electric car company, adding pressure to Honda and Nissan. In 2020, it established the Freedom in Harmony ( MIH) Consortium in hopes of becoming the “android structure of the Vehicle business” and” creating a’ software-defined’ available ecosystem for the Vehicle manufacturing business”. Additionally, Hon Hai and Taiwanese manufacturer Yulon work together to create electronic vehicles under their own design.

The MIH Consortium, which develops guide patterns and open requirements, now has more than 2, 700 people, including more than 100 in Japan. Jun Seki, the CEO of Dongfeng Nissan ( Nissan’s joint venture with Dongfeng Motor in China ), the CEO of Japanese automaker Nidec, and most recently, the CEO of Hon Hai’s electric vehicle operations, is the head of the company.

Seki apparently sees possible synergies with Nissan, which launched its founding electric car, the Nissan LEAF, in 2010, and is said to be interested in acquiring Renault’s communicate of Nissan.

Renault has been backing away from its alliance with Nissan and Mitsubishi Motors, while Honda and Nissan are considering bringing Mitsubishi Motors into a novel, all-Japanese, three-way ally. After cutting back on the production of gasoline-powered cars, this alliance would be no more than 80 % the size of Toyota today, but probably no more than 70 % as large. Despite this, it may conceivably be comparable to the size of the Hyundai Motor Group, which presently leads Toyota and Volkswagen in terms of size.

Note that only three of the world’s top 10 automakers reported year-on-year unit sales increases in the three months to September 2024: BYD ( 38 % ), Geely ( 20 % ) and Ford ( 1 % ). The others reported single-digit declines, except for GM (-13 % ) and Honda (-12 % ). On current trends, BYD perhaps soon beat GM and Stellantis, while Geely catches up with Honda.

Asia Times Chart. Data from motor1.com

Nissan’s overall product sales decreased by only 3 % in the previous quarter, but both sales and prices dropped in China. As a result, the bank’s online income dropped by more than 90 % in the first quarter of this fiscal year, which ends in March 2025. Honda’s online profit was over 20 % in the same time, for the same purpose.

Honda also needs a self-driving car alternative after failing to work with GM on its Cruise robotaxi next week, leaving Honda in the dark. Cruise and GM had a lot in mind when they were planning to visit Tokyo in 2026.

The solution may already be in the works. At the beginning of August, Honda and Nissan announced plans to do joint study into next-generation software-defined cars, autonomous driving and AI, as well as chargers, power paying, and electric car engine and transmission systems (e-axles ). With time, this could lead to self-driving taxis.

Honda intends to follow Toyota and BYD into the passenger car market, where they are already the most popular brand.

Although it is easy to be cynical about these developments, we need to remember that Toyota’s commitment to hybrid vehicles was criticized for years by those who believed pure electric, battery-powered vehicles were the future’s car of the future. They were wrong, and those who are skeptical of the Honda-Nissan merger may also be mistaken. But fighting back against Toyota, Hyundai, BYD, Geely and other aggressive competitors won’t be easy.

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Musk’s DOGE could protect Asia from Trump’s tariffs – Asia Times

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Elon Musk, the driving force behind Tesla and SpaceX, has consistently disrupted traditional industries with his relentless focus on innovation, efficiency and radical change. 

Now, as co-head of the newly established Department of Government Efficiency (DOGE) in Donald Trump’s incoming administration, Musk is poised to reshape not just the US government but potentially the global economic landscape. 

While the overarching goal of DOGE is to cut bureaucratic waste and streamline public services, Musk’s involvement signals a more ambitious agenda: a fundamental rethinking of how technology and government intersect, with significant implications for Asia’s economies.

The world’s richest man’s influence in the new administration is not merely symbolic. His reputation as a disruptor suggests he will bring a Silicon Valley mindset to Washington, advocating for aggressive digitization, automation and the adoption of emerging technologies across government operations. 

This approach, however, is far from straightforward, especially when viewed through the lens of Trump’s threatened new tariffs. These protectionist measures, designed to bolster domestic industries, add a layer of complexity to Musk’s efficiency mission. 

For Asian economies, which are deeply integrated into global supply chains and heavily reliant on trade with the US, the combination of Musk’s efficiency drive and Trump’s tariffs presents both risks and opportunities.

One of the immediate effects of Musk’s leadership within DOGE could be the acceleration of technological adoption in areas like customs and border control. 

Streamlined processes powered by artificial intelligence and blockchain could reduce administrative bottlenecks, making trade faster and more transparent. This would be a welcome development for exporters across Asia, particularly in countries like South Korea, Japan, and Vietnam, where delays and inefficiencies often add significant costs. 

But these procedural improvements may be offset by the financial burden of higher tariffs, particularly in key sectors such as electronics, automotive parts and machinery.

For example, South Korea’s semiconductor industry, which plays a crucial role in the global tech supply chain, will face increased costs due to the new tariffs. While Musk’s push for efficiency might lower non-tariff barriers, the direct impact of higher duties cannot be ignored.

Similarly, Japan’s automotive sector, a major exporter to the US, will need to tackle this challenging landscape. Musk’s known advocacy for electric vehicles (EVs) and sustainable technologies could open doors for collaboration in these areas, but traditional manufacturers may find themselves under pressure to adapt quickly or risk losing market share.

China, the primary target of Trump’s tariffs, faces a particularly nuanced challenge. While the tariffs themselves are a clear obstacle, Musk’s efficiency reforms could paradoxically benefit Chinese exporters by simplifying compliance and reducing bureaucratic hurdles. 

Tesla’s significant presence in China, exemplified by its Gigafactory in Shanghai, positions the country as a potential partner in Musk’s broader vision of government efficiency and technological integration. 

However, the geopolitical tensions underpinning US-China relations complicate this dynamic. Beijing’s response will likely involve a careful balancing act, seeking to leverage any benefits from Musk’s reforms while countering the broader impact of higher tariffs.

India, on the other hand, may find itself in a more advantageous position. With its growing emphasis on digital infrastructure and renewable energy, India aligns well with Musk’s priorities. If DOGE promotes closer US-India cooperation in these areas, it could catalyze significant investment and innovation.

Tesla’s long-anticipated entry into the Indian market could finally materialize, driven by a more favorable regulatory environment shaped by DOGE’s initiatives. Beyond Tesla, the broader renewable energy sector stands to gain, with potential collaborations in solar power, battery storage and electric mobility.

The financial markets are already reacting to the twin forces of Musk’s appointment and Trump’s tariffs. Investor sentiment in Asia is mixed, reflecting both optimism about efficiency gains and concern over protectionist policies. 

Currencies in export-dependent economies like South Korea and Japan are under pressure, while equity markets are closely monitoring developments. In the medium term, much will depend on the extent to which Musk’s reforms can offset the trade frictions caused by tariffs. 

If DOGE succeeds in making the US government more agile and responsive, the resulting improvements in trade logistics could mitigate some of the negative impacts on Asian exporters.

However, it would be a mistake to view Musk’s role purely through an economic lens. His broader vision encompasses a reimagining of governance itself, with implications that extend beyond trade and tariffs.

Musk’s commitment to sustainability, for instance, is likely to influence DOGE’s priorities, potentially leading to increased support for clean energy initiatives. This could create new opportunities for Asian countries that are leaders in renewable energy technologies. 

Japan’s investment in hydrogen, South Korea’s leadership in solar manufacturing and India’s ambitious renewable targets all position these nations as potential partners in a global shift toward sustainability, driven in part by Musk’s influence.

In this context, Musk’s impact on US-Asia relations will be profound but not uniform. Countries that can align with his efficiency agenda and invest in next-generation technologies will likely emerge as winners. 

Those who remain reliant on traditional export models may struggle to adapt. The key for Asian economies will be agility and innovation—traits that Musk himself embodies. Ultimately, Musk’s leadership of the new DOGE represents a bold experiment in governance. For Asia, the stakes are high, but arguably so are the opportunities.

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The nations likely to win, not lose, from Trump’s tariffs – Asia Times

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Donald Trump’s returning to the White House brings with it the high possibility of renewed taxes, a basis of his” America First” plan.

While his critics see isolationism, others see an opportunity—an extreme method to balance global trade and defend American manufacturing. Trump’s taxes, however, are likely to have a far-reaching impact beyond US borders, opening up new opportunities for nations that are ready to step up and fill the void.

For&nbsp, Vietnam, &nbsp, India, &nbsp, Mexico, &nbsp, Malaysia and&nbsp, Thailand, Trump’s method could be a game-changer. As businesses intensify diversification efforts and change supply chains away from China, these countries stand to gain from the world realignment that may result from fresh tariffs.

These nations was experience unprecedented financial transformation if Trump builds on his earlier successes with a more sophisticated technique.

1. Vietnam: Trade battle success

Some countries capitalized on Trump’s 2018-19 trade war with China as efficiently as Vietnam. As American levies hit Chinese goods, companies scrambled to travel production, and Vietnam immediately became a major target. Its low labor costs, corporate closeness to China, and robust US trade agreements made it a good choice.

If Trump reinstates taxes, Vietnam could once again draw companies who want to avoid China’s higher costs. From technology to fabric, its import basic is well-prepared to meet British demand. Trump’s demonstrated willingness to negotiate individual business agreements may strengthen Vietnam’s standing as a preferred partner.

2. India: a proper alliance

Trump’s second term saw a strengthening of US-India relationships, driven by a shared need to counter China. His leadership improved trade and established security partnerships, giving India a significant role as a regional ally.

India’s growing producing center and focus on self-reliance—championed through its” Make in India” initiative—align completely with Trump’s focus on reducing US dependency on China. Trump’s support for bilateral agreements might help India stable trade agreements that support its emerging industries, such as medicine and electronics.

Under Trump, India may grow not just financially but carefully, more merging into US-led efforts to ensure a free and open Indo-Pacific.

3. Mexico: the descriptions superstar

Mexico was one of the biggest beneficiaries of Trump’s first-term taxes. His renewal of NAFTA into the USMCA boosted American firms ‘ ability to link their supply chains more closely while providing a stable platform for business. Mexico’s geographical closeness and cost-competitive work marketplace gave it a healthy advantage.

If Trump renews tariffs on Chinese imports, Mexico’s part as a descriptions hotspot will only increase. With streamlined logistics and lower travel costs, industries like electrical manufacturing and customer goods are likely to grow even further.

Trump’s border laws, though provocative, are unlikely to outweigh the monetary dependence between the US and Mexico.

4. Malaysia: a high-tech lover

Malaysia is truly positioned to benefit from Trump’s focus on cutting-edge business. It is a significant player in the global technical supply chain because of its expertise in manufacturing electronics and technology.

Malaysia became a focal point for businesses looking to reduce their reliance on Chinese manufacturers in delicate business both during Trump’s second word and as Biden did thereafter. If Trump reinstates taxes on Chinese tech materials, Malaysia’s advanced manufacturing industry may see a surge in demand.

Trump’s administration had more incentivize US expense in Malaysia, solidifying it as a trusted companion.

5. Thailand: the dynamic candidate

Thailand is a good winner thanks to its varied economy and robust manufacturing base. Its advantages in automotive manufacturing, technology, and agricultural exports fit well with US business needs.

Thailand benefited directly from the trade war as businesses looked for alternatives to China during Trump’s second term. A second round of tariffs may enhance its role in supply ring growth, particularly if Trump pursues diplomatic trade agreements. Thailand’s ability to balance relationships with both the US and China may be important in maximizing these options.

Why Trump’s strategy may work

Trump’s reviewers often paint his business plans as problematic, but the information suggests they have spurred long-term adjustments that benefit international business dynamics. Trump accelerated shifts that are now required for economic resilience by requiring a reevaluation of China’s centrality in supply chains.

For countries like Vietnam, India and Mexico, Trump’s unapologetic focus on tariffs created openings that might never have emerged under more conventional leadership. His potential return gives these countries a chance to strengthen ties with the US, draw investment, and secure a larger share of global trade.

The balancing act

Of course, the risks remain. Trump’s transactional style and steadfast pursuit of success may rekindle tensions, especially if tariff disputes or trade imbalances arise. But these five countries have shown they can adapt to volatility, leveraging Trump’s bold moves to their advantage.

If Trump learns from the lessons of his first term, refining his strategy to focus on sustained partnerships, his return could usher in a new era of economic collaboration. For Vietnam, India, Mexico, Malaysia and Thailand, the opportunity is immense.

As Trump reshapes global trade, these nations are well-positioned to rise alongside America’s renewed economic ambitions.

Kurt Davis Jr., a Council on Foreign Relations member, is a Millennium Fellow at the Atlantic Council. He is also an advisor to private, public and state-owned&nbsp, companies and their boards as well as creditors across the globe on a range of transactions.

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Asia feels the pinch of growing ‘food chokepoints’ – Asia Times

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In recent years, global food security has suffered from overlapping problems caused by problems, political tensions, climate change, and the Covid- 19 pandemic, resulting in severe foods provide problems.

These problems have been made worse by a number of “food causeways,” such as those that Yemen-based Houthi soldiers have attacked merchant boats and have hampered food shipments through the Suez Canal.

The transport visitors through the Panama Canal has decreased expected to&nbsp, drought&nbsp, which likewise hit river transport systems like as the&nbsp, Mississippi River&nbsp, and the&nbsp, Rhine River.

The emphasis on particular transport routes makes the pressure on global food security even more pressing because the global food system is already becoming increasingly dependent on the movement of meals from a few key “breadbasket” exporting areas to food-deficit locations around the world – frequently through these “food chokepoints”

It furthermore impacts agricultural goods profitability, shipping schedules, as well as food supply and prices. Longer delivery periods even put perishable foods at hazard, while&nbsp, shipping disruptions&nbsp, such as changes to shipping schedules stress cargo management and street transport sectors, causing major delays.

What does Asia’s interpretation of this mean?

For both food- exporting and importing countries, challenges loom. Exporting nations may experience profit margin pressures, which lower the cost of production while importing nations may have to deal with potential increases in transportation costs, which could lead to higher food prices, increased price volatility, and altered consumption patterns.

Due to their reliance on European and Black Sea markets for important agricultural products and fertilizers, Southeast Asia, East Asia, and South Asia are more vulnerable. Import disruptions pose inflation risks, contributing to a cost- of- living crisis.

In countries already grappling with crises like extreme weather ( Pakistan ), conflict ( Bangladesh and Myanmar ), economic turmoil ( Sri Lanka ) and political uncertainties ( Thailand ), &nbsp, food price inflation&nbsp, exacerbates poverty, stalling socioeconomic growth.

The most under- and middle-income households, which are most likely to be affected, may also be at increased risk of malnutrition, which could turn back decades of development progress in Asia.

Trade disruption implications

The US announced plans for a task force&nbsp in late December 2023 to combat the Houthi attacks in the Red Sea, but it is unlikely that immediate redress for trade turbulence and food price inflation will occur.

Concerns about food and fertilizer supplies being manipulated are raised by ongoing supply chain disruptions, as demonstrated by the Ukraine-Russian war, combined with the escalating geopolitical tensions.

Amid recurrent crises, urgent reforms to food systems are essential. Governments and policymakers must prioritize&nbsp, preparedness and resilience- building&nbsp, at national and regional levels to address food security issues and mitigate future impacts.

Governments and policymakers should diversify their sources of supply chain disruptions in addition to the increasing national stockpiles that the numerous net food importing nations in Asia have.

A good example is Singapore, which, while importing over 90 % of its food, has reduced vulnerability to food price and supply fluctuations through contact with&nbsp, more than 180 countries and regions.

This strategy has been largely successful, resulting in Singapore enjoying the world ‘s&nbsp, second most affordable food, behind Australia. &nbsp, The average&nbsp, Singaporean household&nbsp, spends less than 10 % of monthly expenses on food, in contrast with the Philippines ‘ 38 %.

Additionally, the Philippines, which has a large food deficit, ranks low in affordability, importing&nbsp, nearly 80 %&nbsp, of its agricultural imports. Food inflation in the Philippines reached&nbsp, 8 % &nbsp, in 2023.

Facilitating food access

Governments across the country must develop early action plans and strengthen social safety nets to lessen the strain of the cost-of-living crisis. For lower-income households with lower incomes, initiatives like food relief, cash support, and food voucher programs can help ease the strain. Subsidies and tax measures, which can provide temporary relief, may also be considered.

With average households spending over a third of their income on food in countries like&nbsp, the Philippines, and lower- income households in countries like&nbsp, Indonesia&nbsp, spending up to 64 % on food monthly, addressing food price inflation is crucial to safeguard average and lower- income households from undernutrition.

To address the interconnected issues of food availability, access, and affordability, Asian governments reliant on food imports could sign agreements with agricultural exporting countries in the region such as&nbsp, grain and oilseed powerhouses&nbsp, Australia and New Zealand. Doing so can avoid risks posed by chokepoints.

Greater focus on intra- regional trading could also be encouraged, such as in Southeast Asia, which has large exporters of key agricultural products including&nbsp, rice&nbsp, ( Vietnam and Thailand ) and&nbsp, palm oil&nbsp, ( Malaysia and Indonesia ).

Increased intra- regional trade could reduce&nbsp, regional food import dependency&nbsp, while also increasing regional food accessibility, market stability, and economic development. This could be aided by initiatives to encourage investments in agricultural research and development in the area to increase production of other staple grains ( such as wheat ) and reduce reliance on imports.

Looking ahead

The Middle East’s ongoing supply chain disruptions serve as a reminder of how crucial it is to have resilient national and regional food supplies and agrifood systems, according to Asian governments and policymakers. Countries must try to address these interlinked issues at national and regional levels in both the short and long term in the face of persistent food price inflation and malnutrition.

The region has a better chance of preparing itself for the challenges that lie ahead in terms of food security by implementing policy measures like diversifying food imports and strengthening social safety nets.

Genevieve Donnellon- May is a Research Associate at the Asia Society Policy Institute, Melbourne, Australia. Paul Teng is a Senior Adjunct Fellow at Nanyang Technological University (NTU), Singapore’s Nanyang Technological University (NTS Center ), S. Rajaratnam School of International Studies ( RSIS), and the Centre for Non-Traditional Security Studies (NTS Centre ).

This article first appeared on RSIS Commentary, and it has since been republished with kind permission. &nbsp,

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China mulls market rescue as tears of regret flow – Asia Times

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After falling 12.2% this year, Hong Kong’s stocks rebounded 2.63% on Tuesday on news that Beijing may mobilize about 2 trillion yuan (US$278 billion) through offshore entities to support beaten-down Chinese stocks.

The Hang Seng Index, the benchmark of Hong Kong markets, increased 392 points to close at 15,353 on Tuesday. But it is still down 32% from 22,566 a year earlier – and sob stories are plentiful and heart-rending.

For comparison, Japan’s Nikkei 225 from the end of last year grew 9.7% to 36,517 on Tuesday. It has risen 33.8% over the last one year. The Taiwan Weighted Index has eased 0.3% to 17,874 this year but it has gained 19.7% over the past year. 

The Dow Jones Index closed at 38,001 on Monday, up 13% from a year ago, while the S&P 500 gained 22.7% to 4,850.

The rebound in Hong Kong stocks came after Bloomberg reported that Chinese authorities are considering a rescue package backed by offshore money to boost sentiment in the H-share markets.

The report also said Beijing has already put aside 300 billion yuan of local funds that would be used to invest in A-shares. 

Some analysts said Hong Kong stocks’ decline in recent weeks came partly because investors were disappointed by a potential delay of the rate cuts in the United States. They said Hong Kong shares were also dragged down by a slower-than-expected recovery of China’s consumption markets. 

Linus Yip, chief strategist at First Shanghai Securities, told mainland media that there will be support for the Hang Seng Index at about 14,600 points within the short run, but the future trend of Hong Kong stocks will depend on the Chinese economy and people’s consuming power.

Kenny Wan, head of investment strategy at KGI Asia, said the Hang Seng Index was affected by different factors, including the US interest rates and geopolitics. He said many investors have adopted a wait-and-see approach and hoped that Beijing would unveil some supportive measures. 

Meanwhile, some veteran investors blamed Chinese policy makers’ inconsistency in fighting against deflation.

Sob story #1: big mistake

Chua Soon Hock, founder and chief investment officer of Singapore-based Asia Genesis Asset Management, said Tuesday that his firm decided to close its Asia Genesis Macro Fund and return money to clients.

The fund, launched in 2020, declined 18.8% in the first few weeks of January, Chua said in a letter to investors seen by Reuters.  

He admitted that he had made a big mistake by increasing long positions in Hong Kong and China and short ones in Japan. He said he thought that China would outperform Japan this year after being sold off for the past three years while Japan would correct after a 30% gain in 2023.

“I still do not understand the inconsistency of China policymakers’ not fighting against deflation, leading to continued loss of market confidence and prolonged bear market,” he wrote in the letter.

“I have lost my knowledge, trading and psychological edge,” he wrote. “I have reached the stage whereby my confidence as a trader is lost.”

He said his past experience is no longer valid and instead it is working against him. 

Chua said in a post on LinkedIn last month that 2024 would be the beginning of a multi-year bull market for Chinese stocks. Investors had anticipated that the People’s Bank of China would cut the rate for medium-term lending facility (MLF) on January 15 but it did not. 

Next spring

On January 12, the National Bureau of Statistics said China’s consumer price index (CPI) decreased by 0.3 percent year-on-year in December 2023. The figure has been declining for the third straight month. 

State-owned Xinhua News Agency said many foreign media were wrong to jump to the conclusion that China has slid into deflation, and even hyped the possibility of a long-term deflation.

It said the CPI’s low-range performance is mainly a structural issue. It said the core CPI, which strips out volatile food and energy prices, has posted a rather stable year-on-year growth in 2023. 

Hu Xijin, a “patriotic” political commentator and the former editor-in-chief of the Global Times, tried to boost people’s confidence in the stock markets by buying A-shares with his own money.

Initially, the newbie injected 100,000 yuan in his investment account last June, and gradually invested the amount to 480,000 yuan.

On Monday, when the Shanghai Composite Index fell 2.7% to 2,754, the lowest since April 2020, Hu said he felt sad that he lost 10,444 yuan in a single day. He said he has so far suffered a loss of 71,024 yuan, or 17.4% of his money.  

He said it’s urgent for policy makers to launch supportive measures to boost market sentiment. Last month, when his accumulative loss exceeded 42,000 yuan, he said he still believed the Winter of China’s stock markets will soon pass while the Spring will come.  

Prepare for the worst

On Monday, a regular State Council meeting chaired by Chinese Premier Li Qiang said the government will increase the quality and investment value of listed firms and encourage mid-and-long-term capital to enter and stabilize the stock markets.

The call was followed by Bloomberg’s report about the potential launch of a rescue package to support Hong Kong stocks. In fact, Chinese media said some state-owned funds had already entered the A-share markets last week. 

However, Lau Kwan-ming, a Hong Kong financial writer, said in an article on January 16 that once US and European stock markets had started to correct from current high levels, the Hang Seng Index likely would drop farther, perhaps to as low as 12,000. 

He said investors should prepare for the worst – a market crash similar to the ones seen in the Asian Financial Crisis in 1998 and the Global Financial Crisis in 2008. 

In a two-day meeting chaired by Chinese Communist Party General Secretary Xi Jinping on December 11 and 12, the Central Economic Work Conference said the government should direct public opinion to promote the bright side of the Chinese economy.

On December 7, Liu Jipeng, dean of the Capital Finance Institute of China University of Political Science and Law, said he had left his position. His sudden departure came after he’d said in a forum on December 1 that individual investors should avoid entering A-share markets as some outdated listing rules needed to be changed.

Read: Chinese stocks slump after Moody’s outlook cut

Follow Jeff Pao on Twitter at @jeffpao3

Read: Chinese stocks slump after Moody’s outlook cut

Follow Jeff Pao on Twitter at @jeffpao3

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Nobel Sustainability Trust launches digital currency initiative

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MUNICH, Nov. 9, 2023 —A meeting sponsored by the Nobel Sustainability Trust today launched the Central Bank Digital Currency Collaboration Organization (CBDCCO), under the chairmanship of Peter Nobel, president of the Trust. The organization’s goal is to nurture sustainable economic growth and stability by encouraging the adoption of digital currencies.

The inauguration ceremony represents the culmination of years of activity on the part of a pioneering global Central Bank Digital Currency research organization, the International Telecommunications Union Focus group headed by Dr. David Wen. Dr. Wen is the Director-General of the new CBDCCO.

The new initiative draws on experts from leading regulatory and financial organizations, including the European Security and Market Authority, the Federal Reserve, the Official Monetary and Financial Institutions Forum, China Merchant Bank, CBDC solution provider eCurrency, and technology experts from CBDC solution providers like eCurrency, and Modern Sustainable Solutions (MOSS), a leading carbon offset provider.

Dr. Bruno Wu, the President of CBDCCO and Director-General of the World Sustainability Standard Organization (WSSO), outlined a seven-part program in his keynote speech to the founding conference. Dr. Wu was the honoree of last year’s Nobel Sustainability Trust award.

Under the theme “Star Bridge,” the CBDCCO program will work with central banks to develop digital technology, assist in the integration of digital financial infrastructure, promote accounting standards that corporate sustainability data in accounting standards, apply CBDC technology to Real World Asset Management, develop digital infrastructure for improved global carbon asset management, foster technical standards for a wide range of CBDC solutions, and provide innovative technology for regulatory oversight of sustainability products.

Dr. Wu is a shareholder of the parent company of Asia Times.

Peter Nobel, representing the Nobel Sustainability Trust, stressed the importance of embedding sustainability into the core of future economies. They stated, “Digital currencies present a unique opportunity to rebuild and reshape our financial systems with sustainability at their core.” The Nobel Sustainability Trust, long active in the sustainability space, will provide expertise and support for the new organization.

The CBDCCO and the Nobel Sustainability Trust extended an invitation to other organizations and governments to join their endeavors in forging a sustainable and inclusive financial future.

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China driving Marcos deeper into American arms

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MANILA – “I’m not aware of any such arrangement or agreement that the Philippines will remove from its own territory its ship,” Philippine President Ferdinand Marcos Jr said when asked about China’s recent request for the removal of the BRP Sierra Madre grounded vessel from the contested Second Thomas Shoal.

“And let me go further: If there does exist such an agreement, I rescind that agreement now,” Marcos added, the latest fusillade in the leader’s tough stand on China amid escalating tensions in the South China Sea.

The Filipino president was responding to claims by the Chinese Foreign Ministry on August 7 following yet another major incident in the maritime area that Manila had “promised several times” to tow the Sierra Madre away “but has yet to act.”

Over the weekend, Philippine authorities released footage showing China Coast Guard ships blocking and harassing Philippine resupply vessels approaching the Second Thomas Shoal, where a detachment of Philippine marines are stationed over the rusty, half-sunken ship.

China has denied blocking resupply of food and water supplies, but it has defended its latest action by accusing Manila of efforts to transfer construction materials to the area.

The Sierra Madre, a rusted warship that has been grounded on the Second Thomas Shoal since 1999, has been kept in place as a way to reinforce the Philippine claim to the shoal. Photo: Asia Times files / AFP via Getty / Jay Directo

While China has engaged in massive reclamation activities in the disputed sea, it has at the same time opposed any similar efforts by rival claimant states. The Asian powerhouse has also opposed the Philippines’ recent efforts to expand military cooperation with the United States under the Enhanced Defense Cooperation Agreement (EDCA).

The recently enhanced agreement gives US troops rotational access to Philippine bases, including strategic facilities situated close to Taiwan. Speculation has grown in recent months that the US may eventually seek to preposition weapons pointed toward China on Philippine soil.

Confronting growing harassment by Chinese vessels in the South China Sea, top senators and political figures in the Philippines are egging on Marcos to adopt even tougher measures vis-a-vis Beijing. As a result, the notoriously conflict-averse Filipino leader is being forced to harden his line towards China.

Shifting mood

By all indications, the Marcos administration’s foreign policy pivot toward the United States has taken China by surprise. Just weeks after a high-profile state visit to Beijing, Marcos greenlighted an expanded EDCA with the US. Months later, he traveled to the White House and the Pentagon to upgrade bilateral defense ties further.

To be sure, the Filipino president did repeatedly seek to reassure China by vowing that EDCA sites would not be weaponized by the Pentagon. His top defense officials also downplayed the proximity of some of the EDCA sites to Taiwan’s southern shores, emphasizing that Philippine defensive capability development was the main focus of growing cooperation with the United States.

Public statements, however, indicate that China is unconvinced. In a direct challenge to Marcos’s mandate, former president Rodrigo Duterte accepted an invitation to visit top Chinese leaders including President Xi Jinping in Beijing, reportedly to mediate rising tensions.

In recent months, the popular former president has wasted no opportunities to criticize his successor’s pro-US foreign policy, most notably the enhanced EDCA, as unnecessarily provocative toward China and potentially devastating for Philippine sovereignty.

Aside from exerting pressure on Marcos via pro-Beijing figures in the Philippines, China has also upped the ante in the South China Sea. Ever since the Philippines cleared an expanded EDCA with the US, Chinese vessels have engaged in various forms of intimidation against Philippine counterparts.

Beijing’s tough tactics, including the Chinese Coast Guard’s recent use of water cannons against Philippine resupply ships destined for the Second Thomas Shoal, have galvanized Manila’s political elite.

“I’m begging you to stop bullying Filipinos,” exclaimed Philippine Senator Christopher “Bong” Go during a particularly spirited speech earlier this year.

“Just because we are a small country we will be oppressed? Don’t do that!” said Go, vice-chairman of the Senate Committee on National Defense. “Let’s maintain respect. We will fight for what is ours. What is ours is ours. That’s ours. So stop using violence or bullying.”

What makes Go’s comments particularly noteworthy is that the senator is the de facto right-hand man of former president Duterte.

Go, who is of Chinese-Filipino descent, repeatedly accompanied Duterte during trips to Beijing in order to elevate bilateral strategic ties. But now, even this top advocate of Philippine-China relations has begun adopting a more critical stance, at least in public.

Philippine President Ferdinand Marcos Jr (L) and his predecessor Rodrigo Duterte (R) don’t see eye to eye on China. Image: Twitter Screengrab / ABS-CBN

Other key Duterte allies have adopted similar lines. Senator Francis Tolentino, former political affairs secretary under Duterte, has been a leading advocate of stronger defense ties with Western allies.

Earlier this year, he even called for a “new quadrilateral” security alliance with Australia, Japan and the US to counter China’s assertiveness in the South China Sea.

Following the latest incident in the disputed waters, other pro-administration stalwarts have also taken harder lines.

“China’s bullying only promotes discord and instability, which does not do well for regional peace and harmony,” said Senator Ramon Revilla Jr, another key Duterte ally. “We have long advocated for a coexistence built on respect and amity. And with this incident, we must put our foot down and draw the line where the safety and interest of our countrymen are endangered.”

Radical measures

Senators JV Ejercito and Joel Villanueva, who belong to the majority bloc in the 24-member Senate, have called on the Marcos administration to ramp up measures against China while enhancing the country’s defensive capabilities.

In fact, there seems to be growing support for opposition Senator Risa Hontiveros’s earlier call to take China to the United Nations over there South China Sea disputes, as well as pursue joint patrols with Southeast Asian claimant states in the contested waters.

Senate President Juan Miguel Zubiri cited China’s recent “atrocities” as a reason to consider more extreme measures beyond the hundreds of notes verbales filed by the Department of Foreign Affairs (DFA) to Beijing against China’s various actions in the disputed waters.

“Those acts done were completely illegal and therefore a complaint should be filed under the United Nations Convention on the Law of the Sea with the UN,” said Zubiri.

“Not just notes verbale. With due respect to the DFA, with the number of notes verbale – with the number of diplomatic protests – we can gift wrap the Chinese embassy in Metro Manila yet we are still ignored,” the Senate president added, underscoring the hardening stance among the Philippine political elite on the issue.

Top political figures have also called on the government to start refurbishing the Philippine position on the ground, most especially the grounded vessel in the Second Thomas Shoal.

Under the Duterte administration, the Philippines upgraded its facilities across the Spratly group of islands, most notably on Thitu Island, which hosts a relatively large Filipino community composed of both civilians and military personnel.

But refurbishing the Sierra Madre vessel in the disputed area risks provoking an even more aggressive response from Beijing. So far, Marcos seems determined to avoid direct clashes with China, but he will also have to contend with growing public pressure.

An authoritative survey released earlier this year showed that more than eight out of 10 Filipinos want the government to seek US assistance to better defend the Philippines’ position in the South China Sea. Meanwhile, a more recent survey by the New York-based Eurasia Group consultancy showed that 69.8% of respondents held negative views of China.

This photo taken by the Philippine Coast Guard shows Chinese vessels anchored at the Whitsun Reef 175 nautical miles west of Bataraza in Palawan in the South China Sea. Photo: AFP

In the Philippines, public opinion is often king and could eventually force the president’s hands. If the status quo persists, Marcos will have no choice but to further enhance military cooperation with the US to better defend his country’s position in the South China Sea.

He may also seek the Pentagon’s assistance – even if indirectly through security guarantees in the event of potential clashes with China – to refurbish Philippine facilities in the Spratlys.

By resorting to intimidation tactics rather than providing meaningful concessions and incentives, Beijing may have inadvertently alienated a potential ally in one of the most strategically situated nations in the Indo-Pacific, with major implications for the trajectory of US-China rivalry in the region.

Follow Richard Javad Heydarian on Twitter at @Richeydarian

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