Arming Taiwan an unacceptable provocation

The island of Taiwan has been turned into a “powder keg” by the infusion of US weaponry, pushing the Taiwanese people to the “abyss of disaster.”  These are the words of the Chinese Defense Ministry in reaction to the recent $440 million sale of US arms to the island. And now the US is also giving, not selling, arms to Taiwan, courtesy of the American taxpayer.

The ‘First Island Chain’ strategy

Taiwan is but one in a series of islands along the Chinese coast, often called the First Island Chain, which now bristles with advanced US weapons. These are accompanied by tens of thousands of supporting US military personnel and combat troops. 

The First Island Chain extends from Japan in the north southward through Japan’s Ryukyu Islands, which include Okinawa, to Taiwan and on to the northern Philippines. US ally South Korea, with a military of 500,000 active-duty personnel and 3 million reserves, is a powerful adjunct to this chain. In US military doctrine the First Island Chain is a base to “project power” and restrict to China’s maritime access.

Taiwan is at the center this string of islands and is considered the focal point of America’s First Island Chain strategy. When the fiercely hawkish Cold Warrior John Foster Dulles, as US secretary of state, conceived the strategy in 1951, he dubbed Taiwan America’s “unsinkable aircraft carrier.”  

Taiwan is now one source of contention between the US and China. As is often said but rarely done, the pursuit of peace demands that we understand the point of view of those who are marked as our adversaries. And in China’s eyes, Taiwan and the rest of these armed isles look like both chain and noose.  

How would the US react in a similar circumstance? Cuba is about the same distance from the US as the width of the Taiwan Strait that separates Taiwan from the mainland.  Consider the recent US reaction to rumors that China was setting up a listening post in Cuba.  There was a bipartisan reaction of alarm in Congress and a bipartisan statement that such an installation is “unacceptable.” 

What would be the reaction if China armed Cuba to the teeth or sent hundreds of soldiers there, as the US has done in Taiwan? It is not hard to imagine. One immediately thinks of the US-sponsored invasion of Cuba at the Bay of Pigs and later the Cuban missile crisis.

Clearly the arming of Taiwan is provocative act that pushes the US closer to war with China, a nuclear power. 

Secessionist movement in Taiwan

According to the One China Policy, the official policy of the US, Taiwan is part of China.  The United Nations took the same position in 1971 with passage of Resolution 2758 (also known as the Resolution on Admitting Peking), which recognized the People’s Republic of China (PRC) as the legitimate government of all of China and its sole representative in the UN. 

In recent decades a secessionist movement has developed on the island of Taiwan, a sentiment represented by the Democratic Progressive Party. Currently Tsai Ing-wen of the DPP is president. But in the local elections of 2022, the DPP lost very badly to the KMT (Kuomintang), which is friendly to the mainland and wishes to preserve the status quo, or “strategic ambiguity,” as it is called.

Tsai built the DPP’s 2022 campaign on hostility to Beijing, not on local issues. And at the same time her government passed legislation to increase the compulsory military service time for young Taiwanese males from six months to a year. Not surprisingly, this hawkish move was not popular with the under-30 set.

Polling in 2022 showed that an overwhelming majority of Taiwanese now want to preserve the status quo. Only 1.3% want immediate unification with the mainland and only 5.3% want immediate independence. 

Compared with previous years, a record 28.6% of those polled said they preferred to “maintain the status quo indefinitely,” while 28.3% chose the status quo to “decide at a later date,” and 25.2% opted for the status quo with a view to “move toward independence.” Thus a total of 82.1% now favor the status quo. 

Not surprisingly, every prominent presidential candidate professes to be in favor of the status quo. However, DPP candidates also contend there is no need to declare independence, since in their eyes Taiwan is already independent.

The stated policy of the PRC is to seek peaceful reunification with Taiwan. Only if the secessionist movement formally declares independence does Beijing threaten to use force. Clearly the Taiwanese do not wish to find themselves in the position of Ukrainians, cannon fodder in a US proxy war.

Here we might once more consider how the alleged enemy of the US, China, sees things and might react to a formal act of secession and declaration of independence by Taiwan. And again, we Americans might be guided by our own history. 

When the Confederate States seceded from the Union, America descended into the bloodiest war in its history, with 620,000 soldiers dead. Moreover, a secessionist Taiwan, as an armed ally of the US, represents to China a return to the “Century of Humiliation” at the hands of the colonial West. Given these circumstances, arming Taiwan clearly creates a “powder keg.” A single spark could ignite it.

It is difficult to avoid the conclusion that the US is trying to gin up a proxy war that would engulf East Asia, damaging not only China but other US economic competitors like Japan and South Korea. The US would come out on top. It is the neocon Wolfowitz Doctrine put into play. But in the nuclear age such stratagems amount to total insanity.

If some Taiwanese hope that the US will come to their aid, they should ponder carefully the tragedy of Ukraine. Somewhere between 150,000 and 200,000 Ukrainian soldiers have lost their lives so far and millions turned into refugees. 

A similar US proxy war in Taiwan could easily turn into a full-scale conflict between the world’s two largest economies, certainly triggering a global depression and perhaps a nuclear exchange. And US President Joe Biden has committed to send troops to fight the People’s Liberation Army should hostilities break out. So the situation is even more perilous than the one in Ukraine. 

No arms to Taiwan

When all this is considered, arming Taiwan is asking for trouble on a global scale. Taiwan and Beijing can settle their disagreements by themselves. Frankly put, disagreements between the two are none of America’s business.  

So we in the US must stop our government from arming Taiwan. And we need to get our military out of East Asia. It is an ocean away, and no power there is threatening the US.  We do not have Chinese warships off our Pacific coast, nor do we have Chinese troops or Chinese military bases anywhere in our entire hemisphere.  

China calls for peaceful coexistence and a win-win set of relationships between us. Let’s take the Chinese up on that. 

And let’s bring all those troops, submarines, bombers, rockets and warships out of East Asia before they stumble into a conflict or become the instrument of a false-flag operation. 

We should keep in mind the Gulf of Tonkin incident, a fake report of a Vietnamese attack on a US ship that led to the Gulf of Tonkin Resolution, a de facto declaration of war against Vietnam. In the end millions lost their lives in Southeast Asia in that brutal, horrific war. 

Even that will look like a schoolyard squabble compared with the conflagration unleashed by a US-China war.

This article first appeared at Antiwar.com.

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How Do Businesses Leverage Fintech Solutions to Capture the Rising Digital Demand?

Businesses should help cost-conscious consumers stretch their ringgit
A responsible fintech, Boost able to offer solutions in sustainable manner

With about nine in 10 Malaysians concerned over the rising cost of living, primarily for food, household utilities, and fuel, the local consumer behaviour has shifted as Malaysians tighten their belts and purse strings….Continue Reading

Surfing the global electric vehicle wave

Arsjad Rasjid, chairman of Asean Business Advisory Council (Asean-BAC) and chairman of the Indonesian Chamber of Commerce and Industry (Kadin), has shared his opinions about the electric vehicle industry in which Thailand and Indonesia can work together to establish an efficient and resilient supply chain in Southeast Asia for the global EV industry.

How do you perceive Thailand’s remarkable surge in electric vehicle (EV) registrations and the role of public-private partnerships and government policies in driving this growth, and what lessons can Indonesia draw from Thailand’s success to enhance its own electric vehicle market?

Thailand has reported a surge in EV registrations, with over 32,000 EVs registered in the first five months of this year alone. This is equivalent to a 474.43% rise year-on-year.

In Indonesia, with a population of more than 270 million, we sold just 10,000 EVs in 2022 and predict that sales this year will reach only around 50,000 units.

I believe this is a result of public-private partnerships and supportive government policies, which comprise an 80% tax break that came into effect in November 2021 and will continue until Nov 10, 2025, and subsidies ranging from 70,000 baht to 150,000 baht (US$2,000 to US$4,350) for EVs that meet the required criteria from May 2022.

This enables automakers to narrow the price gap between EVs and traditional vehicles, making EVs more accessible and attractive to consumers. As a result, automakers such as BYD, GWM, SAIC, Hozon, and Tesla have entered the market, offering a more comprehensive range of choices for consumers.

From this, we can see a diverse market where the single most popular model, the top three models made up of BYD ATTO 3, Neta V, and Tesla Model Y, only have a market share of 37.5%, 16.9%, and 10.8% respectively.

The Thai model of EV adoption serves as an excellent example for other countries, including Indonesia.

By studying and adapting certain aspects of Thailand’s approach, we can accelerate the growth of our own EV market.

Considering Thailand’s strong position in the automotive market and its attractiveness to international automakers, particularly for electric vehicles, how do you envision the collaboration between Indonesia and Thailand in the production of EVs and automotive batteries, and what potential benefits can be derived from forming joint ventures and partnerships between Indonesian and Thai companies to strengthen the automotive supply chains in both countries and establish a robust EV industry in Southeast Asia?

We recognise the strategic opportunity and potential of collaboration with the Thai automotive industry. Thailand’s strong position in the automotive market, coupled with Indonesia’s abundant resources such as bauxite (world’s sixth-largest reserves) and nickel (world’s largest producer), presents a perfect opportunity for synergy and mutual benefits.

Thailand is the 11th largest automobile producer in the world and 2nd largest pickup truck producer. Thailand has emerged as the preferred production site for about 2,200 automotive parts and accessories manufacturers as well as international automakers including renowned brands like Mercedes-Benz, Toyota, and GWM, particularly for electric vehicles (EVs).

Arsjad Rasjid, Chairman of ASEAN Business Advisory Council (ASEAN-BAC) and Chairman of Indonesian Chamber of Commerce and Industry (KADIN)

Additionally, we are seeing significant investments in Thailand including from the state-owned oil company, PTT, which has committed 93.5 billion baht (US$2.6 billion) to prepare for EV production.

In this sense, Indonesia shares a common interest with Thailand in the production of electric vehicles and automotive batteries. Forming joint ventures and partnerships can significantly strengthen both our automotive supply chains. By integrating our resources, technology, and production capabilities, we can establish an efficient and resilient supply chain in Southeast Asia for the global EV industry.

With the integration of Indonesia’s Quick Response Code Indonesian Standard (Qris) and Thailand’s PromptPay QR opening up significant opportunities for micro, small, and medium enterprises (MSMEs) and tourism businesses, how do you envision this efficient and secure payment solution expanding its reach to a broader consumer base in both countries, and what measures can be taken to further promote the adoption of cashless transactions through the Qris system, fostering increased collaboration and economic activity between Indonesia and Thailand?

The integration of our Qris system with Thailand’s PromptPay QR system opens significant opportunities for micro, small, and medium enterprises (MSMEs) and tourism businesses.

As of December 2022, there are 28.7 million Qris merchants and 90% are MSMEs.

Qris offers an efficient and secure payment solution, expanding its reach to a broader consumer base in Thailand and vice versa. Simultaneously, consumers in both countries will enjoy greater accessibility to a wide range of products. The integration of the Qris system with the PromptPay QR system in Thailand is a source of pride for us, as it aligns with our vision of fostering regional economic integration within Asean.

Establishing an Asean-wide QR Code payment system has been one of our legacy projects at Asean-BAC, and this achievement marks a significant step toward that goal.

Early data on Qris transactions between Indonesia and Thailand demonstrates the promising potential for increased collaboration and economic activity. By the end of 2022, Indonesian QR transactions in Thailand had reached an impressive 14,555 times, amounting to approximately Rp8.54 billion (19.76 million baht).

Conversely, Thai QR transactions in Indonesia totalled 492 times, with a value of around Rp114 million (260,000 baht). The difference in transaction volumes and values reflects the varying levels of awareness, adoption, and market penetration of the QR payment system, highlighting the potential for further cooperation to promote the use of cashless transactions.

Thailand just finished its election; what lessons can be learned from the post-election period in Thailand that can be applied to the upcoming election in Indonesia?

The recent post-election period in Thailand offers several lessons that can be applied to the upcoming election in Indonesia. Here are a few key takeaways. We can see a good collaboration between two parties that are actually competitors, namely the Move Forward Party and the Pheu Thai Party. In the end, they formed two important coalitions and won the election. Learning from this, competition and rivalry do exist, but it cannot be denied that behind the competition, there is still an opportunity to stand together and work toward a better future for the nation.

In this regard, Indonesia can also learn from Thailand. “Bertanding untuk Bersanding“, or “compete to collaborate”, becomes the key to the upcoming elections in Indonesia. Ultimately, all the competition is for the benefit of the nation’s future, so we must all work together to build the country.

We can compete and challenge each other in the democratic process, but in the end, we must unite. We must remember that we have the same goal — the welfare of the Indonesian people. That is what is important and what we must hold together. Instead of being in conflict, wouldn’t it be better for us to join hands, stand together to preserve what we already have, and improve what is not yet perfect? Therefore, let’s compete to collaborate.

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Delhi-Dhaka ties a pivot to steer India’s Indo-Pacific vision

India has long parted from the centrality of Pakistan in its foreign policy and as the assertiveness of China started growing into the waters of the Indian Ocean in the last decade, India looked from the West to the eastern shore of the Bay of Bengal.

With a rapidly growing economy backed by a stable government and the other countries of South Asia having a larger dependency on China, Bangladesh became an important element in India’s neighborhood policy. 

With a shared history and culture, the ties between India and Bangladesh were natural and there has been significant progress made in multiple areas including bilateral trade, which has increased with Indian investments.

Bangladesh is one of the largest recipients of Line of Credit funds from India, and India’s exports to Bangladesh in 2022 amounted to US$13.83 billion while the imports stood at $2 billion.

The hallmark of present-day relations, however, is energy-sector cooperation, connectivity, and engagement in areas of science and technology.

Bangladesh has currently imported 1,160 megawatts of power from India and the 2017 agreement with Adani Power Ltd will provide 1,496MW of electricity from a coal-based power plant in Jharkhand for 25 years.

Bangladesh has also shown interest in procuring military equipment from India, including the Tejas light combat aircraft and Dhruv light helicopters, apart from protective gear such as bulletproof jackets and helmets. 

Bangladesh’s Indo-Pacific outlook

Historically, Bangladesh’s foreign policy has been based on a collaborative approach to avoid being dragged into any geopolitical tensions where it has no vested interests. Although it cannot fully embody the strategic interests of Bangladesh, the idea of “friendship for all and malice to none” became a guiding principle of its foreign policy.

The Indo-Pacific Outlook (IPO) document unveiled by Bangladeshi Foreign Minister A K Abdul Momen on April 24 followed a similar pattern and called for a “free, open, peaceful, secure and inclusive Indo-Pacific,” which was linked to its “Vision 2041” of being a knowledge-based developed country.

The IPO of Bangladesh aligns with India’s vision, which has also been in support of a free and rules-based Indo-Pacific, and though the document claims to be neutral, it has a Western slant.

The West has been trying to include Bangladesh in its Indo-Pacific strategy and bring it closer through key trade and investment partners. Bangladesh’s strategic location serving as a gateway to both South and Southeast Asia and having friendly relations with the Quadrilateral Security Dialogue members makes it an ideal partner for the West and India to engage in their Indo-Pacific vision.

India’s interest in maintaining security and access to the volatile northeastern part of the country and having direct access to the Bay of Bengal can only be possible by engaging Bangladesh. This is in addition to the interest of further strengthening the Act East Policy and containing the military rise of China in the region.

New Delhi is aware of this and has been actively engaging Bangladesh through the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) after the shift from the South Asian Association for Regional Cooperation (SAARC) for regional outreach. 

India’s G20 presidency and Bangladesh 

As India holds the presidency of the Group of Twenty summit this year, it has followed tradition and invited non-member countries including the only South Asian country, Bangladesh, to the summit. This speaks volumes of the importance that India has attached to its eastern neighbor and the role of Bangladesh in its Indo-Pacific vision.

India will be looking to cooperate with Bangladesh in the area of climate change, especially after the visit by Prime Minister Sheikh Hasina to Delhi last year and also collaborate in a smoother transition to cleaner sources of energy.

Apart from this, India and Bangladesh will look to sign the Comprehensive Economic Partnership Agreement (CEPA) that will further boost connectivity and future trade through Asian Network routes (AH-1 and 2), and BIMSTEC.

Since the dominance of the US dollar has been in decline, India and Bangladesh have decided to cut their dependency on the dollar for transactions and have their trade settlements in Indian rupees.

Last, the CEPA will also open up opportunities to create a joint production hub and uninterrupted supply chain.

This regional connectivity, however, needs to be translated into business avenues that can foster growth. With the two governments sharing good relations and Bangladesh’s willingness to be a part of India’s Indo-Pacific relationship, New Delhi has to go the extra mile to offer incentives in terms of Indian investments to Dhaka to steer its own Indo-Pacific vision. 

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Regional maritime law enforcement gets a boost

Thailand and US co-host conference for Southeast Asian commanders

Thai navy commander-in-chief Adm Choengchai Chomchoengpaet (third from left) and Rear Adm Brendan McPherson (third from right), deputy commander of the US Coast Guard Pacific Area, join maritime law enforcement commanders from Indonesia, Malaysia, the Philippines and Vietnam during a meeting in Bangkok this week. (Photo: Wassana Nanuam)
Thai navy commander-in-chief Adm Choengchai Chomchoengpaet (third from left) and Rear Adm Brendan McPherson (third from right), deputy commander of the US Coast Guard Pacific Area, join maritime law enforcement commanders from Indonesia, Malaysia, the Philippines and Vietnam during a meeting in Bangkok this week. (Photo: Wassana Nanuam)

The United States says it is looking forward to closer cooperation on maritime law enforcement in Southeast Asia, following a regional conference co-hosted with Thailand this week.

The ninth Southeast Asia Maritime Law Enforcement Initiative (SEAMLEI) Commanders’ Forum was held at the Anantara Riverside Bangkok Resort hotel from Tuesday to Friday.

Participants included maritime commanders from Indonesia, Malaysia, Thailand, the Philippines, the US and Vietnam as well as representatives from other Southeast Asian nations.

The forum focused on maritime law enforcement and had nothing to do with ongoing territorial disputes in the South China Sea, stressed Thai navy commander-in-chief Adm Choengchai Chomchoengpaet and Rear Adm Brendan McPherson, deputy commander of the US Coast Guard Pacific Area.

They said the forum was aimed at promoting cooperation on maritime security and safety and discussing challenges facing coast guards and maritime law enforcement authorities.

Robert Godec, the US ambassador to Thailand, said those challenges included transnational crimes, trafficking and illegal, unreported and unregulated fishing.

The US is a major import and export market for the region and the forum provided opportunities to address the challenges, he said.

The forum helped the participating countries to strengthen relationships and foster the trust that is essential to solving problems and advancing common goals, the ambassador said.

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Southeast Asian countries expect the US and China to responsibly manage their relationship, says Blinken

JAKARTA: Southeast Asian countries expect the United States and China to “responsibly manage” their relationship, US Secretary of State Antony Blinken said on Friday (Jul 14). 

“We have an obligation … both the US and China, to responsibly manage our relationship,” he said.

“We want to make sure the competition that we are in does not veer into conflict. And that starts with good communication. It starts with making sure there are no misunderstandings or misperceptions.”

He emphasised that dialogue with China is of importance to US President Joe Biden, who has sent a flurry of diplomats to Beijing to engage with Chinese counterparts in recent weeks.

This includes US Treasury Secretary Janet Yellen last week, climate envoy John Kerry in the coming days, and Mr Blinken himself last month.

“We have profound differences that we are trying to manage responsibly. There are areas where we should be able to cooperate because it’s in our mutual interest, and in the interests of other countries as well,” he added.

“I have heard from countries throughout Southeast Asia that there is an expectation that both the US and China will responsibly manage our relationship. That is what we are intent on doing.”

Mr Blinken made the remarks during a wide-ranging interview with CNA’s Indonesia correspondent Saifulbahri Ismail.

The Secretary of State was visiting Jakarta to attend meetings with foreign ministers from the Association of Southeast Asian Nations (ASEAN) as the regional bloc held its annual meeting.

Aside from Washington’s ties with Beijing, the wide-ranging interview also touched on US engagement with Southeast Asia, tensions in the South China Sea, as well as the worsening Myanmar crisis.

ASEAN AND THE SOUTH CHINA SEA

Mr Blinken avoided a question on whether the US means to increase its military presence in the region, especially in the South China Sea.

Instead, he spoke about the US’ economic engagement in the region and stressed the need for freedom of navigation in the Indo-Pacific.

“We are focused intensely on an affirmative agenda that answers the needs of people in the region, as well as our own citizens,” he said

“We are the single largest provider of foreign direct investment (in ASEAN). That’s tremendously beneficial to the region, and also to us … On an economic basis alone, we see so much of the future being written here in the Indo-Pacific broadly, and in Southeast Asia as well.”

Mr Blinken emphasised it is “very important” to have a shared vision with the bloc and a “free and open” Indo-Pacific.

“We, as do all of our partners in ASEAN, share a commitment to freedom of navigation, the rule of law, and to making sure that we preserve a free and open Indo-Pacific that includes the ability of people, goods and ideas to move lawfully and freely throughout this region.”

He added that the US is keen on deepening its engagement with Southeast Asia on issues of shared interests including climate change, energy, economic growth, infrastructure and health.

MYANMAR CHALLENGE

Mr Blinken praised Indonesia’s leadership as ASEAN Chair, despite a deteriorating crisis in Myanmar.

“Indonesia has been leading very strongly and insisting on upholding the Five-Point Consensus and trying to (get) the military junta … to re-engage in dialogue and to move the country back on the track of democracy,” he said.

“But unfortunately, we’ve not seen any kind of positive response from the regime.”

He cited a worsening situation with deadly violence perpetrated by the junta, the continued detention of political prisoners, and the difficulty in getting humanitarian assistance to those affected by the crisis.

Mr Blinken said diplomats have discussed Myanmar extensively during the meetings and ASEAN is united in its approach of resolutely standing behind the Five-Point Consensus, a peace plan adopted in April 2021 between the bloc and Myanmar’s military leaders.

He acknowledged that while sanctions have not deterred the junta from bloodshed, there is a collective need to continue putting pressure on the regime.

“It is important to deny the military regime the resources that it needs to continue to repress the people of Myanmar … It is also very important that countries do not provide weapons, or support the military regime, because that will only add fuel to the fire of its own making.”

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Move Forward Party leader Pita’s prime minister bid defeat ‘a blow to the Thai electorate’: Analysts

But it may be an uphill task for Mr Pita to get more senators to vote for him, and over a short few days. All senators were appointed under the junta-drafted constitution. 

“I don’t think it’s a given that he can convince enough of them. He needs another 51 votes,” said Dr Ockey, whose research interests include comparative politics and Southeast Asia.

“It may be that he can win over a few votes from opposition parties, but he won’t get enough (votes) there. So he has to win more senators.”

Move Forward’s main ally Pheu Thai Party is expected to stick with Mr Pita for the second ballot for a new prime minister next week, said observers. 

“If they’re seen as quickly flipping sides and moving to work with the caretaker government parties, then it could be politically damaging,” said Mr Jay Harriman, senior director at BowerGroupAsia. 

“The easiest route for Pheu Thai is probably to give Pita one more chance before deciding on alternative options.”

Dr Montesano noted that if Pheu Thai teamed up with parties associated with a previous military-backed government, many voters would be very upset, and that could be one trigger for unrest. 

“If Pheu Thai worked out a compromise and continued to work with Move Forward and Move Forward remained in the coalition, voters might be less upset,” he said. 

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How Thailand’s prime minister race can take a whole new turn

Move Forward Party Leader Pita Limjaroenrat looks on at a voting session for a new prime minister at the parliament, in Bangkok on Thursday. (Reuters photo)
Move Forward Party Leader Pita Limjaroenrat looks on at a voting session for a new prime minister at the parliament, in Bangkok on Thursday. (Reuters photo)

After failing to win over conservatives in his first attempt to become prime minister, things are looking increasingly difficult for pro-democracy leader Pita Limjaroenrat to secure a victory even if he were to try again.

The parties outside of Mr Pita’s Move Forward-led coalition and the majority of military-appointed senators are opposed to his key campaign promise of amending the so-called lese majeste law that punishes anyone for defaming or insulting the King or other royals.

Also, the Harvard-educated politician risks disqualification as a lawmaker after the poll body found him in breach of election rules — saying he held shares in a defunct media company while running for public office. While he may still go for a second chance at premiership when parliament meets next on July 19, analysts expect support for Pita to wear thin within his alliance should he lose again; although there’s no limit on the number of re-votes he can seek. 

“I think they will run him again,” said Kevin Hewison, emeritus professor of Asian Studies at the University of North Carolina at Chapel Hill. Another attempt by Pita will probably harden the stance of conservatives and only weaken support for the pro-democracy alliance, according to Hewison.

The longer it takes for Thailand to form a new government, the more investors will lose confidence in the $500 billion economy whose expansion has been lagging emerging-market peers in Southeast Asia through the pandemic and after. Political wrangling between pro-democracy and conservative groups have also hurt the country’s stocks, bonds and currency markets.

Here are some other scenarios that could play out:

– Pita supports Pheu Thai

Mr Pita could step aside and instead support his coalition partner Pheu Thai, which finished second-place in the May 14 general election and is linked to exiled former leader Thaksin Shinawatra.

Isra Sunthornvut, a former member of parliament for the Democrat Party, said he wouldn’t be surprised if next week Mr Pita throws his support behind Pheu Thai to lead the government “for the sake of the country and democracy”. 

The only challenge to this scenario is that Pheu Thai may find it difficult to muster support from the conservatives while still being an ally of Move Forward, which has refused to back down on its push to amend the royal insult law.

Pro-democracy group splits

That could leave Pheu Thai inclined to consider breaking away from Move Forward’s coalition and try forming a government led by one of its three candidates for the post, including real estate magnate Srettha Thavisin and Paetongtarn Shinawatra, the youngest daughter of Thaksin.

Thaksin, who has been considering returning home, had previously said Pheu Thai would not support any attempt to reform the lese majeste law. That makes it easier for Pheu Thai to win enough support from the 250-member military-appointed Senate, helping put a new government sooner than later.

The private sector wants the new government to be in place as soon as possible, so our economy can continue to grow as expected, Thai Chamber of Commerce Chairman Sanan Angubolkul said Friday.

– Military-backed minority government

A third scenario involves the Senate supporting a minority government led either by Bhumjaithai’s Anutin Charnvirakul or one of the military-backed parties. That outcome, however, risks sparking protests by supporters of pro-democracy groups. 

Since the Senate’s ability to vote for the prime minister expires next year, any minority government is at risk of falling in a no-confidence vote. To guard against that, it’s possible that the establishment may petition the courts to disband Move Forward as what happened in the past to their predecessor, using the push to amend the royal insult law as a pretext, and even annul the election result.

“But that might take some time,” Hewison said referring to the process of disbanding Move Forward and annulling the result. “That said, going to an election quickly is unlikely to produce a different result. But conservatives in Thailand are a balmy lot.”

However, any move to ban the nation’s popular politicians may lead to massive demonstrations. And this time the risks are even higher for the royalist establishment, as protesters have recently been much bolder in directly targeting the monarchy than in previous years.

Such a turn of events could end up hurting tourism, the only economic engine that’s firing on full cylinders and supporting Thailand’s growth amid a downturn in global demand for goods.

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China’s June exports hit by weak Western demand

China’s exports decreased at a faster pace year-on-year in June than in May as Western demand was hit by high inflation and interest rate hikes.

The country’s exports to the United States fell by 23.7% to US$42.7 billon in June from a year ago while exports to the European Union dropped 12.9% to US$44 billion, according to the General Administration of Customs. In May, the figures were only down by 18.2% and 7% to the US and EU, respectively, from a year earlier.

Chinese officials blamed the weakening global demand, protectionism and geopolitical risks for the exports slump. But they said they are confident that China’s external trade will remain stable in the rest of this year due to the country’s efforts to explore emerging markets.

Dongguan factories

Chinese exporters have felt the negative impact of the weakening demand from the West on their orders since late 2022. Although China ended all its Covid rules in January this year, many manufacturers started downsizing or closing their businesses from March.

Media reports said several plastic and electronic parts suppliers, based in Dongguan and Shenzhen in Guangdong province, told their staff that they faced huge operational difficulties due to insufficient orders, serious losses and customers’ arrears. But this is only a tip of the iceberg.

In mid-April, Chinese manufacturers were disappointed to see a decline in the number of buyers from Europe and the US in the Canton Fair, the largest trade show in China. Some exporters said they saw more buyers from Latin America, Africa, Southeast Asia and Russia but these customers may provide lower margins. 

More manufacturers in Dongguan, including a major paper box maker and a 30-year-old textile firm, closed their businesses last month, according to media reports. 

A man surnamed Zhu says in a video posted on June 25 that he’s been trying to find a factory job in Dongguan but has seen only notices that factory owners seek to rent out their properties. He says he knows that some factories are offering workers only 12-13 yuan (US$1.68-1.82) per hour, which he calls too low for anyone to live on. 

Trade with ASEAN also down

Some economists said the West’s call to diversify supply chains from China to Southeast Asia only has a small impact on China’s overall exports. They said China can ship its raw materials and unfinished products to Southeast Asian countries for processing and then send them to western markets.

But China’s exports to ASEAN also contracted – 15.9% and 16.9% – year-on-year in May and June, respectively, as Southeast Asian countries were also struck by the weakening Western demand.

Last month, China saw a decline in its exports to all key trading partners, except Russia and Singapore.

In the first half of this year, China recorded a 3.97% drop in total exports from the same period of last year. This compared with a year-on-year decline of 0.16% for the first five months of this year.

 “The world’s economic recovery is sluggish while risks such as unilateralism, protectionism and geopolitics are growing,” Lyu Daliang, the spokesman for the General Administration of Customs, said in a media briefing on Thursday. “The negative impact of the weakening foreign demand on China’s external trade is lingering.” 

However, he added that while the year-on-year growth of China’s external trade declined in June, the month-on-month growth was stable, meaning that the fundamentals of the Chinese economy are unchanged.

“In recent years, our foreign trade companies have given full play to their subjective initiative to explore new regional markets such as ASEAN and other developing countries, while stabilizing economic and trade exchanges with developed economies,” he said.

“Since the beginning of this year, our country has resumed face-to-face foreign affairs exchanges at all levels. Our ‘home-court’ diplomacy has continued to heat up,” he said. “In the first half, our country’s trade with ASEAN, Latin America, Africa and Central Asia increased by 5.4%, 7%, 10.5%, and 35.6%, year-on-year, respectively.”

Liu said China will continue to diversify its trading partners and expand its “friend circle” in global trade.

In the first four months of this year, China recorded a 15% growth in its exports to ASEAN, partly offsetting a 14.3% decline in shipments to the US and a 4.3% contraction to the EU.

Short-term outlook bleak

A Gansu-based financial columnist writes in an article published on Thursday that China’s exports started to decline in May due to the negative effect of the interest rate hikes implemented from last year. He says it’s unlikely that the unfavorable situation will change in the short run since countries such as Vietnam, South Korea and Singapore are also receiving fewer orders.

He says China should boost its economy by stimulating domestic consumption and infrastructure investment in the second half of this year. He says cutting mortgage rates may encourage people to spend more.

Peng Bo, a researcher at the Chinese Academy of International Trade and Economic Cooperation, says in an article published earlier this month that China will face more challenges in external trade in the second half of 2023 as its exports to emerging countries have also contracted from May. 

Peng adds that the decline of China’s exports was partly caused by the relocation of some manufacturers from China to other countries while such a trend will continue for some more time. 

Read: China needs its consumers to consume, workers to work

Follow Jeff Pao on Twitter at @jeffpao3

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Thai opposition leader loses PM bid

Despite falling far short of the threshold to become Thailand’s next prime minister, opposition Move Forward Party leader Pita Limjaroenrat pledged Thursday to keep up the fight.

“With the results of what happened in the parliament today, I accept it but I’m not giving up,” Pita stated in a post-vote press conference. “I’m going to strategise once again … just to make sure that we reach 376 later on.”

Despite being the leader of the largest party in the country’s parliament, the 42-year-old landed 51 votes short of the majority 375 required to win the day’s prime minister selection vote. Even with Move Forward’s electoral popularity, the outcome was less a shock, more of a bitter disappointment to the progressive party’s supporters. The decision hinged on the solid rejection by members of the military-appointed Senate, a 250-member legacy of the 2014 military coup, where some lawmakers had made no secret of their disdain for the upstart opposition.

It’s not our job to listen to the people. … Even if you got 100 million votes, I still wouldn’t pick you if I don’t like you or find you suitable.

Senator Prapanth Koonmee

“It’s not our job to listen to the people,” said Senator Prapanth Koonmee in an earlier interview with Bloomberg. “Even if you got 100 million votes, I still wouldn’t pick you if I don’t like you or find you suitable.”

Still, most senators refrained from actually voting against Pita, who was the sole candidate for the prime minister’s office. He was able to secure only 13 Senate votes in favour of his premiership, while a further 159 senators abstained from the vote. More than 40 senators failed to show up altogether.

With the failure to select a new prime minister, Thailand now enters an uncertain period of ill-defined leadership. Political observers see a range of possible roads forward – including the threat of yet another military intervention in the event that representatives fail to form a new government in a timely fashion.

During five hours of parliamentary debate preceding Thursday’s vote, both senators and members of conservative-aligned parties within the House of Representatives criticised Move Forward’s proposed amendments to the country’s lèse-majesté law, which criminalises critique of the monarchy.  

Lèse-majesté has emerged as a political flashpoint in recent years and especially during the mass mobilisations of pro-democracy protesters in 2020. A case taken up by Thailand’s Constitutional Court on Wednesday alleges the party’s promise to reform the law amounts to an attempt to overthrow the country’s system of government. 

That same day, the national Election Commission also requested the court suspend Pita as a member of parliament over criminal accusations that he’d run for office while aware he might be ineligible due to owning a small stake in a defunct media company.

Lawmakers who spoke against Pita on Thursday pointed to these cases as disqualifying factors in his bid to become prime minister. 

“The Constitutional Court’s decision to look into potential illegalities by Pita (which are trumped up) legitimised decisions by Senators to vote against him, thus dooming his chances of becoming prime minister,” said Paul Chambers, a specialist on Thai politics at Naresuan University in Thailand, in a message to Globe.

The next vote for prime minister is scheduled for 19 July, and Pita has already indicated his intention to make a second attempt at the premiership.

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