Asian Insider May 29: China could hit back with rare earths ban; US-China discussions at Shangri-La Dialogue 2019

Asian Insider brings you insights into a fast-changing region from our network of correspondents.

East Asia’s troubled ties with Trump: China’s offended, Japan’s upset and South Korea lives in hope that Pyongyang will behave

Rumblings continue in China over President Donald Trump's actions on trade tariffs, while in Japan, policy makers are mulling over the trade deal that is to be taken up with the United States. And in South Korea, as Seoul prepares for the US President's stopover visit when he heads to Japan later in June, there's some serious thinking going on, on how to bring Pyongyang back to the negotiating table. Here's an update:  

US-China: In late February, reports had it that talks were on for a meeting between Mr Trump and President Xi Jinping at the US President's private Mar-a-Lago resort. It didn't happen and now that seems a distant possibility, as the ongoing trade war escalates. Amid a rise of nationalist sentiments, state media say China could hit back with a ban on the export of rare earths, which is critical for the making of smartphones, televisions, cameras and light bulbs. China produces more than 95 per cent of the world's rare earths but efforts are underway to come up with substitutes. Meanwhile, Huawei has asked US courts to rule against the ban on its equipment and experts, in the US, are warning that the Trump administration could be underestimating China. Is anyone thinking about the consumer? 

US-Japan: Prime Minister Shinzo Abe's charm offensive during Mr Trump's visit didn't quite work to plan. Mr Trump's remark that the two countries will be "announcing some things, probably in August, that will be very good for both countries," caught Japanese officials unawares. But August doesn't seem so far off with the US President due to return back to the country in June, on another visit. As our Japan Correspondent Walter Sim notes, Trump has repeatedly chastised Japan for its trade surplus of US$67.6 billion (S$93.1 billion). Going forward, will Mr Abe look to develop his friendship with the US or will he need to abide by his wishes?  

US-South Korea: President Moon Jae-In, who has long championed talks with North Korea, is hoping his administration will be able to make some gains on discussions with North Korea on denuclearisation, before President Trump drops by, ahead of his visit to Japan. But is Pyongyang recalibrating its nuclear strategy? Read our South Korea Correspondent Chang May Choon’s report.  

Related story: 
Singapore does not engage in currency manipulation, says MAS  

The Monetary Authority of Singapore (MAS) has refuted reports that the country uses currency manipulation to gain an export advantage. Singapore's comments follow the release of a US Treasury report that put Singapore on a watch list with four other countries. In a statement, MAS said that Singapore's monetary policy framework is centred on the exchange rate and has always been aimed at ensuring medium-term price stability and will continue to do so. 

ST Associate Editor Ravi Velloor dives into the issue in his article: What it means for Singapore to be on US currency watch list

China’s Defence Minister at Shangri-la Dialogue 2019

After a gap of eight years, the Shangri-La Dialogue, to be hosted in Singapore from May 31 to June 2, will see China's defence minister Wei Fenghe speak at the forum. The Chinese Defence Minister's address on June 2 will take place a day after US Acting Secretary of Defence Patrick Shanahan speaks to delegates on America's Indo-Pacific strategy. Singapore Prime Minister Lee Hsien Loong will open the Dialogue, taking up US-China ties and the global role of small states in his keynote address.

Why the Dialogue matters: It's a very unique forum bringing together defence ministers from around the world who share their views on globally relevant issues and new initiatives to improve security. Bilateral meetings on the sidelines of the meet command their own attention. This year, many countries are hoping to have one-on-one discussions with the General Wei.

Useful link: Visit our Microsite on the Shangri-La Dialogue for regular updates. 

Related stories: 
Shanahan to meet Chinese counterpart in Singapore: US official
Larger military exercises on the cards as Singapore and China revise defence pact

Jokowi’s Cabinet, Modi’s plans

Update on Indonesia:  Indonesian President Joko Widodo could be eyeing young professionals and politicians for his Cabinet, for the next five years. Some names are already in circulation. Meanwhile, reports suggest Indonesian Finance Minister Sri Mulyani Indrawati could be being considered for a more senior role with oversight of his economic team.

Update on India: Would you change your strategy if you won by a huge margin? Prime Minister Narendra Modi has won by a significant margin and while the issues that require attention is a long one, it is not immediately clear what will change. Read ST Associate Editor Vikram Khanna's article for insights on what he could do, or needs to do: Modi has only himself to beat

Singapore, Asia score in competitiveness rankings

The definition of competitiveness goes this way, according to the IMD Business School note on its rankings: It evaluates the extent to which a country fosters an environment where enterprises can achieve sustainable growth, generate jobs and, ultimately, increase welfare for its citizens. Singapore has emerged on top in the rankings this year, followed by Hong Kong and the United States.

Key insights: The U.S., which was on top in last year's rankings, dropped two places, which the report says could be a consequence of the confidence from the tax cuts that President Donald Trump brought about fading, while high-technology exports weakened. Economies in the Asia-Pacific performed well, with 11 of 14 economies in the region either improving or maintaining their rankings. Those that figure in this list include Taiwan, Australia, Malaysia, Thailand, South Korea, Japan, Indonesia, India and others.

Go deeper:

The robots are coming - how is the Asian workforce adapting?

Trump’s protectionist quagmire

Robots begin to change the face of Asian hospitality

It used to be said that Asian hotel hospitality beats systems elsewhere. But with robots proving to be more efficient, that's beginning to change. Yip Wai Yee, ST's Tech Correspondent flew down to Hangzhou, China to check out the FlyZoo hotel that promises guests a high-tech stay. And she walked away, impressed. Guests rarely interact with staff, your face becomes the key to unlocking your room, the gym etc, while roving robots bring amenities to the room. And there are other smart hotels in the region. Fortunately, the trend is limited to cities now. Natural bounty and Asian hospitality still abounds elsewhere.

Other developments:

Some Hong Kong judges fear a collision course with Beijing as the special administrative region's government pushes for sweeping legal changes that would, for the first time, allow fugitives captured in Hong Kong to be sent to mainland China for trial.

Australian navy pilots were reportedly hit by lasers during flights in the hotly contested South China Sea, the national broadcaster reported on Wednesday (May 29), with informal Chinese militia vessels believed to be behind the attacks.

Myanmar’s ultra-nationalist monk dubbed the “Buddhist Bin Laden” for his anti-Muslim vitriol has been summoned for reprimand by the country’s top religious council, as police pursue charges of stirring up unrest. Will he turn up? And will action be taken?  

That’s it for today. We’ll be back tomorrow.

- Shefali