Today Trends

Author: Giulia Ajmone Marsan, ERIA The economic dynamism of ASEAN is well-known and in recent years the region has seen the emergence of some of the fastest growing digital economies in the world. The COVID-19 pandemic accelerated this trend, with 60 million new digital consumers since the pandemic started and the internet economy on track to account for US$360 billion by 2025 .   The acceleration of the digital economy coupled with needs spurred by COVID-19 restrictions have catalysed digital-enabled innovation and entrepreneurship in the region. This is reflected in several indicators. According to Bloomberg, Southeast Asian tech start-ups raised approximately US$8.2 billion in 2020, outperforming most other emerging markets, though this has slowed in 2022 in line with global trends. In 2021, there were more than 30 ASEAN unicorns — start-ups with a value of US$1 billion or more — and that number is growing fast . Thanks to this dynamism, investors are looking beyond trad...

Authors: Aidan Arasasingham and Emily Benson, CSIS On 23 May 2022, US President Joe Biden and 12 regional counterparts officially launched the Indo-Pacific Economic Framework for Prosperity ( IPEF ). After almost five years since the United States withdrew from the Trans-Pacific Partnership (TPP), the IPEF aims to reassert US regional economic engagement and provide a US-led alternative to China’s economic statecraft in the Indo-Pacific. Yet there remain questions about the ability of the United States to incentivise closer regional economic cooperation through this framework. Twelve regional counterparts, including Australia, Indonesia, Japan and South Korea, joined the Tokyo IPEF launch on 23 May 2022. It was widely anticipated that close US allies like Japan, Australia, New Zealand and Singapore would join the IPEF launch, but seven other Indo–Pacific countries — including all of ASEAN’s APEC members— also joined. With an increasingly assertive China aiming to redefine rules...

Authors: Hannah Elyse Sworn and Manoj Harjani, NTU Intellectual property (IP) has long been a sore point in relations between Washington and Beijing. US officials have repeatedly targeted China for widespread counterfeiting since its economic ‘opening up’ in the late 1970s. But after enduring a punishing series of legal reforms to join the World Trade Organization in 2001, the Chinese government is still under fire for weak enforcement, forced technology transfers and state-sponsored IP theft. Now China’s growing ability to produce IP indigenously is driving the evolution of US–China economic relations.   In 2021, China was the world’s top patent filer for the third year in a row. Chinese firms have filed approximately 75 per cent of global artificial intelligence patents in the past decade and 40 per cent of all 6G patents, while the United States accounted for only 35 per cent of the latter. The country’s ability to produce IP across a number of critical and emerging tech...

Author: Christoph Nedopil Wang, Fudan University State-owned enterprises (SOEs) in Asia are in a unique position to take a leading role to shift economic activity from polluting to green. Yet so far, most SOEs have underutilised green financial instruments, such as green bonds, to support this transition. This leaves ample room for growth which could spur further investments in innovative and green technologies, support development of green capital markets and reduce the risks of climate change. Given Asian countries’ commitment to accelerate their energy transition to meet ambitious carbon reduction targets, SOEs — including their regulators and owners — urgently need to transform their business operations. SOEs have a monopoly in energy generation and transmission in many Asian countries, and account for about 60 per cent of infrastructure investments and up to 70 per cent of fossil fuel-related and energy transition investments. With these assets in incumbent sectors, SOEs globa...

Author: Jorrit Gosens, ANU Despite big announcements on climate ambitions from major emitters and a pandemic-induced economic slump, prices for thermal coal spiked to above US$400 per ton in early May 2022, the highest they’ve been in at least 50 years .  So is net-zero ‘all over bar the shouting’, as one Queensland commentator would have it? And does the price spike justify investment in new mining capacities in coal exporting countries — for example, in Australia’s Galilee basin ? The price spike can be partly explained by increasing demand for fuel. The economic slowdown caused by COVID-19 reduced global coal consumption by about 4.5 per cent in 2020, but rebounding economic activity resulted in a 6 per cent jump in 2021 .  A far bigger driver of the price spike can be found on the supply side. Due to disruptions in mining and transport activities, global trade in coal fell by about 10 per cent in 2020, at a more rapid pace than consumption. In 2021, the recove...

Author: Emma Dalton, RMIT Gender inequality is a stubbornly entrenched problem for Japan. It ranked 120 out of 156 countries in the World Economic Forum’s Global Gender Gap Index (GGI) Report 2021 , which measures the gap between men and women in political representation, economic empowerment, education and health. This puts Japan at the bottom of the ladder among the developed world. In comparison, neighbouring China, South Korea and Singapore were ranked 107, 102 and 54 respectively, while the United States, Canada, Australia and the United Kingdom were ranked 30, 24, 50 and 23 respectively. What is remarkable about these reports is the fact that Japan’s ranking has not improved over time, unlike in other countries. In 2006 , the first year the Report was published, Japan ranked 79 out of 115 countries while France and Bangladesh ranked 70 and 91 respectively. France and Bangladesh gradually narrowed their gender gaps, rising to 16 and 65 by 2021. Japan has not followed the tren...

Authors: Peter Drysdale and Shiro Armstrong What might become the new normal in Australia’s relationship with China is a major question for Australia’s new Albanese government. There will be no simple reinvention of the old relationship. But the change in government in Australia provides an opportunity for both countries to articulate and pursue again common imperatives that flow from shared global economic interests. The starting point is acknowledgement and support of multilateral principles and interests in the conduct of their trade and economic relationship. That will also contribute to strengthening the global economic order. The large Australia-China economic and political relationship was built on both countries’ commitment to that open multilateral system. China as the world’s largest trading nation has a huge stake in that. Despite its transgressions against Australia and other countries, China has substantially complied with WTO trade law. Trade law is nonetheless incompl...

Author: Editorial Board, ANU Japan is shrinking and ageing. The population fell by 618,000 last year and Japan’s society is the oldest in the world with almost 30 per cent of the population aged over 65. In 15 years that share will be one-third. There are 80,000 centenarians and the number is growing. Each person of working age will need to support more in society as longevity and a low birth rate continue to age Japan. That rising dependency ratio means productivity growth will become even more important to sustaining the living standards of the population. Japanese society faces that challenge with an eye-watering government debt of 270 per cent of GDP — the highest on record, ever, for any country — compared to 137 per cent in the United States or 48 per cent for Australia, for example. Government debt continues to increase with Japan’s ‘silver democracy’ making it difficult to cut back rising healthcare, aged care and pension costs. Defence spending is rising and there are no p...

Author: Richard Katz, Carnegie Council for Ethics in International Affairs For six long months, the Kishida administration, aided by outside advisors from universities and new companies, toiled to translate Prime Minister Fumio Kishida’s mantra of a ‘new form of capitalism’ into concrete policies. The rather hollow end product that the Cabinet approved on 7 June 2022 must have disappointed many of the participants. When it came to the foundational principle — that healthy growth and a more equal distribution of income needed each other — Kishida surrendered to critics in the ruling Liberal Democratic Party (LDP) and financial markets who wrongly accused him of promoting socialism. In reality, promoting redistribution to reduce inequality and improve consumer demand is a longstanding ingredient in the standard macroeconomic recipe. Some critics claim that rather than distribution measures, Kishida would achieve better wage growth through reforms that enhanced labour productivity. W...

Author: Toshiya Takahashi, Shoin University While the Japanese media were occupied by the Russian invasion of Ukraine, Japan’s economic security bill passed without strong opposition in the Diet in May 2022. Reflecting increasing concerns about China’s trade obstructionism and economic espionage, the bill outlines measures to defend Japanese supply chains, infrastructure and leading technology. But the new security policy will have uncertain effects on Japanese security and business. Focussing on four areas of economic security — supply chains, basic infrastructure, leading technology and patent publication for sensitive technologies — the law enables the national government to intervene in Japanese companies’ dealings with foreign companies. The law encourages Japanese companies to diversify supply chains with critical materials, while the government provides funds for diversification if companies meet certain conditions. If the procurement and supply of basic infrastructure hav...