Briefing MONTHLY #80 | January 2025
Trump in Asia | Election watch | Korea’s showdown | Pacific business call-up | Strategic thinking
Illustration by Rocco Fazzari.
SELL SIGNAL?
Donald Trump is often said to regard the stock market as the best measure of his Administration despite declaring “tariff” to be his favourite word.
So just when his staff appointments are sending uncertain signals about whether he is visualising a tariff war or a real war with China, the arrival of the Chinese-designed DeepSeek artificial intelligence (AI) model has changed the calculations.
It is beyond conventional tariff retaliation, appears to challenge the economics of US initiatives such as Trump’s Day 2 plan to build a US$500 billion network of AI data centres, and most tellingly has shaken US investor optimism about a new tech boom.
Much earlier than expected, DeepSeek will test the policy-making coherence of the Administration’s emerging Asia team which ranges from Tesla founder Elon Musk’s business links to China to Secretary of State Marco Rubio’s call to cut China economic interaction. In between is a confusing array of America First high tariff protectionists, defence realist “restrainers,” and security first “prioritisers” on China.
Despite all this, the convening of the Quad foreign ministers in Washington on the day Trump was inaugurated suggests Asia ranks high on the Administration’s priorities. So too, does the list of Asian foreign ministers on Rubio’s initial phone call schedule. See NEIGHBOURHOOD WATCH and ASIAN NATION. And DATAWATCH contains a fascinating Asian nation opinion poll split on the new Administration.
Meanwhile, amid the US leadership change and the tight contest looming in the Australian federal poll by May, this year is a slow year for elections in Asia – certainly after last year’s voting in India, Indonesia, and South Korea.
Our annual election outlook suggests Japan will be the place to watch this year with Prime Minister Shigeru Ishiba struggling to retain a coalition majority in the country’s upper house after being forced into minority government in the lower house last October. It will also be interesting to see how the long-ruling People’s Action Party goes in Singapore with the Lee family receding into the background. See ELECTION WATCH
Greg Earl
Briefing MONTHLY editor
NEIGHBOURHOOD WATCH
TRUMP IN ASIA
While China may have escaped the day one tariff blow that was widely flagged by then incoming President Donald Trump, the almost simultaneous emergence of a competitive Chinese artificial intelligence model seems to have restored Beijing as a core focus of the new Administration.
Some analysts say that China security hawks appear to be making more progress in taking over key Administration positions than those who would apply tariffs more broadly on Asian security allies with trade surpluses. Incoming Secretary of State Marco Rubio provided the sharpest weight to this telling his Senate confirmation hearing: “In less than 10 years, virtually everything that matters to us in life will depend on whether China will allow us to have it or not. Everything from the blood pressure medicine we take to what movies we get to watch and everything in between, we will depend on China for it.”
However in his first phone call with Chinese Foreign Minister Wang Yi, Rubio reportedly restated the traditional US position of not supporting Taiwan independence. This has contributed to an alternative analysis that the appointment of China hawks is aimed more at restraining China rather than paving the way for conflict.
Trump lent weight to this approach by telling the World Economic Form annual meeting that trade with China did not have to be “phenomenal,” but only “fair,” and that he always had a “great” relationship with Chinese President Xi Jinping. And his response to the arrival of DeepSeek was more equivocal in terms of conflict with China than might have been with him simply warning that it “should be a wake-up call for our industries that we need to be laser-focused on competing to win.”
The ability of foreign ministers from the Quadrilateral Security Dialogue to secure the first official diplomatic event for the new Administration bodes well for that institution as an important diplomatic platform for the Trump team. But Rubio’s list of calls with other foreign ministers had quite a broader Asian flavour. In his earliest calls he spoke with the foreign ministers of the Philippines, Indonesia, South Korea, Vietnam, and China.
- Amid “incoherent” appointments, Joshua Kurlantzick, argues in The Japan Times that security issues in Asia are likely to outweigh trade issues in the second Trump Administration.
KOREA IMPASSE
Supporters of detained South Korean President Yoon Suk Yeol were waving American flags before Donald Trump’s inauguration as US President. But with the new Trump Administration now grabbing global attention with its policy changes, it remains to be seen what impact it has in its longstanding security ally across the Pacific.
Yoon’s botched martial law declaration has prompted competing legal processes to both impeach him from political office and charge him with criminal insurrection provoking some parallels with the Trump renaissance.
Opinion polls are now showing a rapid recovery for Yoon’s conservative People Power Party (PPP) after a decline when the party was initially divided over his martial law action. The PPP now has a more unified pro-Yoon stance in the National Assembly and the detained President is receiving substantial support in the streets where Trump-style anti-establishment slogans are being used.
Yoon is defending himself in the impeachment process in the Constitutional Court while refusing to answer questions in the insurrection investigation and seems to be winning public sympathy for perceived judicial overreach by his left-wing opponents and the prosecutors.
With a series of senior political leaders variously forced out of office by the showdown, the central bank has conceded it held back from cutting interests rates in early January due to the turmoil. A Constitutional Court ruling on the impeachment is likely before April 18, when the terms of two of the eight judges expire, although Yoon seems intent on dragging out the proceedings, perhaps in hope of receiving some form of support from Trump.
- At Nikkei Asian Review, Jospeh Yi argues the South Korean judiciary should allow Yoon and his party to defend themselves in the court of public opinion rather than in competing legal processes.
INDONESIA’S LUNCH BREAK

A free lunch Prabowo-style Picture: The Jakarta Post
Indonesia’s new President Prabowo Subianto has spent almost a third of his first 100 days in office travelling the world in a strikingly activist approach to foreign policy apparently aimed at drumming up more foreign investment.
That orientation was underlined by Indonesia’s reversal of a previously sceptical approach to the joining the BRICS (Brazil, Russia, India, China and South Africa) group, leaping ahead of its neighbours Malaysia and Thailand. The Albanese government has previously talked up its role in encouraging Indonesia to aim for joining the more western-oriented Organisation for Economic Cooperation and Development rather than the BRICS.
Meanwhile at home, policy reform is proving harder with a substantial reversal for a plan for a higher Value Added Tax to boost Budget revenue, a scaling back of the President’s key campaign promise of free school lunches, and signs of policy tensions amongst his sprawling ministry over industrial policy issues. However, Probowo retains significant political capital for changes with an 80 per cent approval rate.
Prabowo is claiming to have drummed up billions of dollars in new investment from his travels to nine countries (China, US, Peru, Brazil, Britain, United Arab Emirates, Egypt, Malaysia, and India, along with bilateral meetings at the Summits including Prime Minister Anthony Albanese in Peru).
The positive opinion poll numbers suggest the start of the program to provide free lunches to all school children and pregnant mothers has been welcomed. But the initial provision to less than 600,000 children is well short of the 80 million people being targeted raising concerns about whether the country can afford it without higher economic growth and better revenue collection.
A continuing row over the production of Apple iPhone in Indonesia has underlined how the campaign to attract more foreign investment to boost growth will run into more protectionist sentiment at home. Meanwhile Indonesia is arguing that the decision to join the BRICS group is in line with its traditional foreign policy commitment to neutrality rather than a shift towards alignment with China in international economic policy. As the Foreign Ministry puts it: “Indonesia believes that BRICS provides a valuable platform for fostering South-South cooperation and ensuring that the voices and aspirations of developing countries are heard and reflected in global decision-making processes.”
- The new President is reshaping Indonesian foreign policy in ways that may surprise diplomatic partners, according to Trystanto Sanjaya in The Jakarta Post.
INDIA: NATION BUILDER
Global economic commentator Martin Wolf has described former Indian prime minister Manmohan Singh to be one of the greatest men he ever met. So, Singh’s death at 92 on December 26 represents a significant passage of time in the evolution of what is now the world’s most populous nation and fastest growing large economy.
Singh is perhaps unfortunately better remembered for his time as prime minister between 2004 and 2014 where the Congress Party government was marred by corruption scandals that led to the rise of incumbent prime minister Narendra Modi’s very different style of politics.
But as many obituaries have observed, his real legacy was his time as finance minister in 1991-96 where he rose to the challenge of undoing the anti-trade and market policies which had dominated post-independence India giving rise to the notion of a (low) Hindu rate of economic growth.
As a soft-spoken academic-turned-bureaucrat, Singh was the antithesis of the nationalistic tone that infects many modern Indian announcements, but he delivered on the prediction in his first 1991 Budget: “No power on earth can stop an idea whose time has come. I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea."
Modi’s success making India the world’s fastest growing large economy has been built on initial reforms by Singh. They range from the nuclear deal with the US which has transformed that diplomatic and economic relationship to the beginnings of the Aadhar identity card system that underpin many Modi-era changes.
- Salil Tripathi says at Foreign Policy that Singh unlocked the Indian tiger’s cage while also ensuring that no further harm would come to the poor.
ELECTION WATCH

Vote counting in the Vanuatu election this month. Picture: Benar News
JAPAN: Ishiba’s second chance
The future of Japan’s relatively new Prime Minister Shigeru Ishiba may depend on his Liberal Democratic Party retaining majority control of the country’s upper house in an election due by late July.
Ishiba suffered a near terminal blow when his LDP/Komeito coalition lost control of the country’s lower house in October in an election Ishiba called abruptly after taking over the prime ministership. He now leads a minority government.
The House of Councillors election will possibly be held on July 13, based on the current parliamentary session, to choose 124 new members of the 248 member House for six-year terms. The LDP coalition holds 142 seats now.
The outcome will largely depend on the ability of the increasingly diverse opposition parties to reach cooperation deals in the 32 single seat constituencies up for election and negotiations are now under way on carving up the seats. The upper house election is likely to be preceded by an election for the Tokyo assembly which should provide some insights into the fortunes of the new opposition parties.
PHILIPPINES: Marcos rules
The May 12 general election in the Philippines will likely be dominated by incumbent President Ferdinand Marcos Jr’s efforts to undermine the prospects of his Vice-President Sarah Duterte running for president in 2028.
Voters will choose 12 out of the 24 Senate seats and all 317 members of the House of Representatives, along with provincial governors, city mayors and local assembly members. Modelled on the US system, this “mid-term” election can hamstring the sitting President, but in this case is more focused on the Vice-President who is elected separately to the President and in this case has broken with Marcos.
The main interest will be in how many Marcos-aligned Senators will be elected because they will play a key role in any impeachment action against Duterte – the daughter of former president Rodrigo Duterte – which would prevent her running for the presidency in future. Senators are also future presidential candidates and Marcos has drawn two former opponents into his Senate team underlining his dominance of politics.
One curiosity will be the fortunes of Marcos and Duterte family related candidates across the country with the former dominant in the north and the latter more powerful in the south. Rodrigo Duterte is running again as Davao mayor where his political career started and Marcos’ sister Imee is running as a notionally independent Senator.
Meanwhile the first regular election to the autonomous Bangsamoro Parliament in the Muslim southern Philippines will be held with the general election after it was postponed in 2022.
SINGAPORE: new era
Singaporeans will go to the polls by November 23, although the country’s 15th general election is more likely to be in the middle of the year after a Budget on February 18 and amid 60th birthday celebrations.
It will be the first election since 2006 without Lee Hsien Loong at the head of the People’s Action Party (PAP). Lee’s father served as founding prime minister from 1959 to 1990 and then as senior minister or minister mentor until 2011, making this election potentially the end of the Lee era in Singapore.
Incumbent Prime Minister Lawrence Wong has been ritually warning the PAP can’t take victory for granted for several months and kicked off the election process last week with a review of the boundaries. Wong is characterised as the head of a new fourth generation of political leadership in Singapore, but the election will be the first test of whether the public sees him that way.
There are now 93 seats, spread across 14 single-member constituencies and 17 group representation constituencies. The PAP support fell to 61 per cent at the 2020 election reflecting a slow long term decline in its support, but it still won 83 of the seats which makes the boundary review a key factor in how the seats are divided.
HONG KONG: Beijing’s long reach
An election for Hong Kong’s Legislative Council is due to be held in December in what will be the second test for the territory’s political system since China imposed new national security law and electoral changes in 2021.
Under the new system 20 seats are directly elected for geographic constituencies, 30 seats go to trade-based indirectly elected constituencies, and 40 seats elected by a 1,500-member Election Committee. Plans to introduce electronic ballot boxes for this election have prompted some concerns that voters may fear that their votes are no longer secret.
PACIFIC: personality politics
After Vanuatu’s election this month, three other small Pacific nations will go to the polls this year with the potential for upsets for Australian relationships in these highly personalised electoral systems. The Vanuatu election – amid an earthquake and three prime ministers in two years – has seen former deputy prime minister Jotham Napat, who heads the Leaders Party, secure 11 seats in the 52 member Parliament which puts him a strong position to form a coalition government.
Elections will be held in Micronesia on March 4 for ten of the 14 Congress seats with all candidates standing as independents. A Nauru election is due by September for 19 members from eight multi-member seats. An election is due in Tonga by November where there are 17 directly elected single seat members along with nine seats for royal family members and four for non-elected ministers.
ASIAN NATION
QUAD FIRST

Penny Wong with Iwaya Takeshi, Marco Rubio, and Subrahmanyam Jaishankar in Washington. Picture: @SenatorWong
The three Quadrilateral Security Dialogue representatives each got 45 minutes with the new US Secretary of State Marco Rubio in the Trump Administration’s first official diplomatic engagement. But India’s Subrahmanyam Jaishankar was first in the door to see Rubio alone and while Japan’s Iwaya Takeshi had to wait until third, he at least received a short US government “read out” on how the countries would “deepen ties” during the Trump Administration.
That left number two official visitor Foreign Minister Penny Wong left to declare after that it was “fantastic opportunity,” “warm and productive,” and went longer than anticipated. The read out said the two countries would “continue” security cooperation through AUKUS and bilateral defense initiatives, and “enhance our partnership” on critical minerals and global supply chain security.
Rubio said nothing. And the official statement from the joint meeting provided little sense of any new direction under the changed US leadership beyond “strengthening regional maritime, economic, and technology security in the face of increasing threats, as well as promoting reliable and resilient supply chains.” Wong said: “It was important for what we discussed and, as important, it was a signal of the priority that the Trump administration places on the Indo-Pacific – and this is a good thing for Australia's interests.”
US media reports suggested discussions were also under way for a leaders’ meeting of the Quad countries.
ELEVATING ASIA
A review of Australian government funding for non-government strategic research has backed a stronger focus on relationships with large Asian countries in contrast to the current strong emphasis on the US alliance.
It says: “It is understandable that the predominance of effort in terms of strategic policy work in the sector has a US alliance focus. But that strategic policy focus should be extended to our strategic relationships with the major powers of the Indo-Pacific such as China, India, Japan, Indonesia and Korea which get far less attention than they warrant.”
The review, commissioned by the Department of Prime Minister and Cabinet last year and written by former senior diplomat and current University of Queensland vice-chancellor Peter Varghese, argues the inadequate focus on Asian countries is partly due to the scattered nature on university expertise on individual countries and the inability of education institutions to consolidate that expertise.
And it describes the falling China expertise as a “systemic failure” with 40 universities producing about five graduates a year with an Honours degree in Chinese studies with language. Noting China will influence the world order and Australia's region as much as the US, the Review says: “We must have greater depth and multi-disciplinary experts on China to inform the most consequential decisions Government will make on Australia’s security and prosperity in the coming decades.
The report supports the role that non-government think tanks and commissioned research can play in subjecting government strategic policy development to external scrutiny and in raising public understanding of the strategic challenges facing Australia. But it reveals that two thirds of the $40 million a year currently spent by government agencies, led by the Department of Defence, is directed to seven organisations, many of which have a substantial focus on the US alliance.
It has recommended a new system with a five-year funding cycle of more competitive and transparent project grants with better linkage to current government priorities. This would see the end of block funding for some of the existing large recipients by around 2027 probably in favour of a more dispersed funding system for more research agencies.
The government has agreed in full to eight of the 14 recommendations and has reserved judgement on implementing the others saying the changes will promote a stronger and more sustainable strategic research sector.
- See the debate over the implications of the review’s findings between the University of Sydney’s James Curran and the Australian Strategic Policy Institute’s Euan Graham.
DEALS AND DOLLARS

TWO ASIAS

Source: Global Economic Prospects
Economic growth in Asia and the Pacific over the next year will continue to be a story of two halves – China and the rest. The World Bank’s Global Economic Prospects report says China’s growth is set to slow further to 4.5 per cent this year, although that is 0.4 percentage points higher than the Bank anticipated in June, and continue down to four per cent in 2026.
Growth in the rest of the East Asia and Pacific region is expected to edge up to 4.9 per cent and then settle at 4.7 per cent in 2026. In South Asia growth will average 6.2 per cent across the period driven by India.
Putting the pandemic years aside, this will be the first time in 30 years that Chinese growth has fallen short of the rest of the region. In China, the Bank says: “Consumption growth will remain weak against a backdrop of subdued consumer confidence, soft labour market conditions, and adverse wealth effects from declining property prices … Consumption and investment are set to remain lacklustre amid a continued population decline, a further buildup of public and corporate debt, and slowing productivity growth.”
The Outlook says that despite the relatively strong growth, the risks in East Asia remains tilted to the downside centered on adverse global policy shifts especially in trade policy given the export oriented nature of many Asian economies.
PACIFIC CALL-UP
The business end of statecraft under the Albanese Labor government is taking a significant step up in the Pacific with International Development and Pacific Minister Pat Conroy saying the government would push businesses to use their expertise to fill opportunities that would otherwise be filled by Chinese interests.
After telling Telstra and banks to step up in the Pacific instead of withdrawing, Conroy has warned that businesses needed to understand that the idea of a social licence to operate also extended to foreign affairs.
“You need to maintain a social licence to operate in Australia, to have profitable returns and part of that social licence isn’t just about providing quality products to Australians, it’s about working to make Australia safer by ensuring we are the partner of choice in the Pacific,” Conroy said in an interview in The Australian Financial Review. “You can expect to see this ramped up over the next three years. It’s a critical part of us rebuilding our standing in the Pacific.”
While pressure on business to remain in the Pacific began under the former Morrison government, it has significantly stepped up under the current government with Telstra receiving substantial debt and equity assistance to buy mobile telecommunication company and the broader role for Export Finance Australia.
But while the Commonwealth Bank has assumed responsibility for providing banking services in Nauru and Westpac has retained ownership of banking businesses in Papua New Guinea and Fiji after trying to sell them, the government is still negotiating with the ANZ Bank over the retention of its Pacific businesses despite earlier announcing they would remain open.
DIPLOMATICALLY SPEAKING
I think you are working very hard to ask me to comment on a domestic policy announcement that the President made just a few hours ago, and as I said to you, I don't intend to do that. I have a job to do here in Washington, and that is to advocate for Australia's interests, our security interests and our economic interests, and that's what I'll be doing.
- Foreign minister Penny Wong in Washington (January 21)
DATAWATCH
TRUMPED: the global vote

Source: European Council on foreign Relations survey
ON THE HORIZON
G20 OR BUST

Asia and the world will get one of the first close-up collective insights into the new US Administration in South Africa in February when the annual Group of 20 major economic powers year begins.
Secretary of State Marco Rubio and Treasury Secretary Scott Bessent are likely to provide the first insights into how the Trump deal will deal with other major countries both bilaterally and multilaterally.
The G20 foreign ministers meet on February 20-21 and will likely focus on geopolitical conflicts including the Ukraine and Israel-Hamas conflicts.
The G20 finance ministers and central bank leaders Ministerial Meeting is on February 26-27. South Africa may come into early conflict with the Trump Administration over G20 leadership by seeking to include climate mitigation and adaption financing, food insecurity, and inequality issues on the agenda.
Australia is notionally the sixth Asian region G20 member alongside China, India, Japan, South Korea, and Indonesia. This will be the fourth G20 in a row chaired by a large developing country from the BRICS (Brazil, Russia, India, China and South Africa) Group (now Indonesia has joined) making it likely the Trump Administration will be disinclined to give this institution much priority.
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