Today Trends

Author: Faizal Yahya, NUS With the global aviation market still recovering from the COVID-19 pandemic, the Asia Pacific region has gone from a world leader in aviation growth to a laggard. Airports Council International (ACI) data indicates that air passenger traffic in the Asia Pacific region experienced a 62.7 per cent reduction from 2019 to 2021. In comparison, the total world passenger traffic decreased by only 48.3 per cent. When it comes to freight aviation, the Asia Pacific region’s recovery also lags behind the rest of the world, albeit less dramatically. Air freight traffic increased by 1.5 per cent in the Asia Pacific region across the same period compared to a 2.9 per cent increase in global air freight. Continued COVID-19 lockdowns in China have maintained pressure on the region’s role in global supply chains.  The air transport sector accounts for US$944 billion of the Asia Pacific’s GDP, with the region accounting for more than 50 per cent of the 87.7 million workers

Author: Diana Schnelle, Ruhr-University Bochum Russia’s invasion of Ukraine on 24 February 2022 shook the world to its core. Unsurprisingly, the vast majority of states didn’t hesitate to publicly condemn Russia’s unilateral aggression and express solidarity with Ukraine. Japan was no exception . Tokyo has joined the international response to Putin’s aggression by imposing sanctions on Russia on an unprecedented scale. The impact on the global energy market has already been huge. In the first week after the invasion, oil prices increased by about 15 per cent — a massive surge on top of an already significant rise since the beginning of the year. In an effort to counteract the pressure on oil prices, IEA member countries agreed to release 60 million barrels of oil from their emergency reserves. But without a commensurate increase in production, it seems unlikely that the price increase will be effectively reversed. After an OPEC Plus meeting on 2 March decided not to make any ad

Author: Heribert Dieter, German Institute for International and Security Affairs Since mid-2021 Lithuania has been the target of Chinese diplomatic censure and economic boycotts. The Lithuanian government has angered Beijing with two measures — withdrawal from the 17+1 process, a dialogue platform between Eastern European countries and China, and allowing the opening of an office representing the Taiwanese government. While Lithuania is small, its policymakers insist that they can set their own foreign policy, including diplomatic relations with Taiwan. But the Lithuania–China conflict has transformed into a clash between the China and the European Union. China has been undiplomatic in its response to the Lithuanian government, partly because it does not want to tolerate the departure of even a small country from the 17+1 dialogue, one of President Xi Jinping’s prestige projects. Even more important is preventing Lithuania from establishing ties with Taiwan. The Chinese leadership

Author: Editorial Board, ANU Policymakers have spent decades trying to stop financial crises. After Russia’s invasion of Ukraine, those in the United States, Europe and their partners have been trying their best to start one. Starting a financial crisis is a bit like starting a house fire. It involves four basic steps: take away the fire extinguishers, douse the place in petrol, light a match and retreat to a safe distance. Removing the fire extinguishers is the logical first step. There’s not much point starting a fire if it can be put out before it gets going. In the context of a financial crisis, this means removing Russia’s access to its foreign exchange reserves and stopping them from acquiring more. Foreign exchange reserves are vital for stopping a financial crisis. If investors start fleeing a country, its currency falls in value. This makes it much more expensive to import not just consumer goods but also vital materials for production and, more importantly, it increases

Authors: Nico Ravanilla, University of California, Renard Sexton, Emory University and Dotan Haim, Florida State University As the campaign to replace term-limited Philippines President Rodrigo Duterte has kicked into high gear, one hot topic is what will happen to his notorious ‘war on drugs’. Aggressively confronting drug dealers and users was a cornerstone of Duterte’s 2016 electoral campaign. Duterte largely delivered what he promised — a brutal crusade that left thousands of people dead, alienated allies like the European Union and United States, and prompted an international investigation into human rights abuses. Although initially popular, the anti-drug campaign lost support over time as more and more Filipinos came to fear that they or someone they know would get inadvertently targeted. Inconsistency in police reports about the deaths of three teenagers in 2017 set off a wave of protests. A recent study indicates that up to a third of respondents who claimed to suppo

Author: Barry Eichengreen, UC Berkeley What will be the demonstration effect of Western sanctions on Russia? And what will be the reaction of China and of other countries worried about similarly being on the outs with the United States? Will they shift their foreign exchange reserves away from US treasury bonds? Will they reduce their reliance on the dollar and US banks? Will they curtail their commercial and technological dependence on the United States, cutting supply chains and reshoring production? Will the global economy be reconfigured into rival blocs? The answer to these questions is no. Although we have seen some movement in these directions, this has not been a result of Russian sanctions . Prior to Putin’s attack on Ukraine, the United States and China, along with other countries in their orbits, had moved some way in the direction of decoupling. The United States and China slapped tariffs on one another’s exports, and a change in US administration has brought no sign of

Author: Chietigj Bajpaee, King’s College London The renewed polarisation of the international system following Russia’s invasion of Ukraine and the intensification of the US–China strategic rivalry is increasing pressure on other countries to pick sides. But despite this return to a ‘with us or against us’ narrative, Japan and India, as aspiring global powers, are well-positioned to bring a much-needed non-western perspective to discussions on the emerging global order. In this context, Japanese Prime Minister Fumio Kishida’s visit to India in March 2022 assumes added importance beyond the bilateral agreements that were concluded, which included 5 trillion yen (US$42 billion) in Japanese investment in India and the India–Japan Clean Energy Partnership . The larger strategic significance of Kishida’s visit lies in its reaffirmation of Japan’s role as a shaper of India’s regional engagement and broader global outlook. This year marks the third decade of India’s ‘Look East’ Policy —

Author: Julien Chaisse, City University of Hong Kong Hong Kong recently applied to join the Regional Comprehensive Economic Partnership (RCEP). The underlying aim of RCEP is to create an integrated market across the region. RCEP accounts for roughly 30 per cent of the world’s output, trade and population. RCEP membership is ‘open to any state or separate customs territory after the lapse of 18 months from the date of enforcement’. Accession is important for Hong Kong but also to RCEP as it opens up to new members. While there have been protests against Hong Kong’s ‘ one country, two systems ’ principle in the past, there appear no significant barriers or objections that would impede Hong Kong’s participation in RCEP. Hong Kong has completed negotiations with ASEAN — a precondition for joining RCEP. ASEAN has declared that Hong Kong is ‘well-placed to add value to RCEP’. China is also supporting Hong Kong’s application to which it has no objections within the framework of it

Author: Ramonette B Serafica, PIDS Six years ago, in his first State of the Nation Address , Philippine President Rodrigo Duterte underscored the need to relax economic restrictions to attract more investment. Included in the legislative agenda, and outlined in the Philippine Development Plan 2017–2022 , were amendments to the restrictive provisions in the constitution and laws which limit foreign participation in the economy. Although discussions on economic constitutional reform did not go beyond committee level, let alone pass in the Senate, in the last few months three laws relating to economic liberalisation were passed by Congress. The first to be enacted was Republic Act 11595 amending the Retail Trade Liberalisation Act. Signed on 10 December 2021, it reduced the minimum paid-up capital requirement for foreign retailers from US$2.5 million to PHP25 million (US$485,000). Under this act, foreign retailers with more than one physical store must have a minimum investment per

Author: Tran Van Tho, Waseda University Vietnam is highly integrated into the global economy and since 2017, trade has consistently sat above 200 per cent of GDP. Vietnam has trade relationships with more than 150 countries, but the majority of its trade is concentrated between China, South Korea, and the United States — forming a new Pacific Trade Triangle. In 2020, the United States and China accounted for 45 per cent of Vietnam’s exports. The share of Chinese and South Korean imports rose to 50 per cent, with one third of total imports coming from China. The type of products traded, and the trade imbalance between partners, is noteworthy. Reliance on the United States as an export destination, representing about 40 per cent of Vietnamese exports in 2020, has seen Vietnam’s trade surplus with Washington rise rapidly in recent years. Vietnam is highly dependent on imports of intermediate goods such as semi-processed products and capital goods from China and South Korea, resultin