from Asia Unbound

Friday Asia Update: Top Five Stories for the Week of April 17, 2015

April 17, 2015

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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

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Ashlyn Anderson, Lauren Dickey, Darcie Draudt, William Piekos, and Ariella Rotenberg look at the top stories in Asia today.

1. Japan court blocks reopening of nuclear reactors. A Japanese district court issued orders for two nuclear reactors in western Fukui prefecture to stay offline, rejecting regulators’ safety approval of the planned restart later this year. The court criticized the Nuclear Regulation Authority’s lax safety standards, particularly in the wake of the March 2011 Fukushima crisis. Kansai Electric, the operators of the reactors in Fukui, plan to file a protest asking the court to reverse its decision. With all forty-eight commercial reactors in Japan still offline, the decision may further delay Prime Minister Shinzo Abe’s plans to restart nuclear reactors. Abe has said the shutdown damages the struggling Japanese economy, forcing Japan to import expensive fossil fuels to compensate for the existing energy deficit.

2. China registers slowest economic growth rate in six years. Chinese economic growth slackened to 7 percent in the first quarter of 2015, its slowest pace since 2009. A number of economic indicators suggested such a downturn: industrial production increased at its slowest pace since late 2008; retail sales grew at the slowest rate in nearly a decade; and land purchases by developers fell 32 percent in the first quarter. At a conference before the data was released, Premier Li Keqiang stated that “economic data in the first quarter are not pretty,” but also that “our toolbox still has many policy tools, and the biggest tool is reform.” Many economists expect Beijing to counter the slowdown with interest rate cuts to encourage more lending. Economic growth remains in line with the government’s goal of “around 7 percent” growth for 2015; for its part, the Economist sees the slowdown as “not a cyclical blip but a structural downshift.”

3. South Korean bribery scandal and Sewol anniversary shake Park Geun-hye’s approval rating. Sung Wan-jong, chairman of a construction firm that allegedly was a graft recipient, claimed he paid bribes to leading Park administration officials, including Prime Minister Lee Wan-koo. Following his admission, Sung committed suicide, adding further scrutiny to the investigation. President Park Geun-hye has sought to distance herself from the scandal. Speaking through New Frontier Party Leader Kim Moo-sung, Park has promised to put an end to suspicion, indicating openness to a possible independent investigation. Park this week is also dealing with closer criticism for her handling of the one-year anniversary on Thursday of the Sewol ferry sinking, including even the victims’ families’ protest at the memorial service. She currently faces multiple hits to her ever-declining approval rating (now at 34 percent, down five points from the week prior) following a variety of scandals since the 2012 presidential elections. While the first scandals did not seem to affect her administration’s approval rating, since the Sewol ferry sinking her administration and governance has been object of close scrutiny.

4. Concerns echo over China’s activities in the South China Sea. This week, Philippine President Benigno Aquino emphasized that the world--not just countries in the region--should be concerned about Chinese territorial claims in the South China Sea, citing threats to global trade. New satellite images revealed that China is making significant progress on an airstrip for possible military use in one area of the contested Spratly Islands, which are claimed in part or whole by China, Brunei, Malaysia, the Philippines, Taiwan, and Vietnam. At a Group of Seven meeting this week, foreign ministers released a statement opposing attempts to unilaterally change the status quo in the East and South China Seas, words clearly intended for Beijing. Meanwhile, Japan logged its second-highest number of jet scrambles this year since 1958. The recent uptick is partially due to tensions with China in the East China Sea, but also a land dispute with Russia.

5. Narendra Modi jet sets to France, Germany, and Canada. This week, Indian Prime Minister Narendra Modi completed his longest foreign tour to date: nine days to France, Germany, and Canada. The purpose of Modi’s trip was to promote India as a stable location for foreign investment and new business development. In particular he focused on his government’s “Make in India” initiative and allayed concerns about the ease of doing business in India. In France, Modi met with President Francois Hollande and several key French chief executive officers. One significant outcome of the meetings was India’s purchase of thirty-six Rafale fighter aircraft in fly-away condition “as quickly as possible.” In Germany, an important step was taken with Modi’s promise to set up a formal mechanism to ease German investment in India—a measure previously only taken for Japan and the United States. In Canada, Modi was the first Indian prime minister to visit in a stand-alone bilateral capacity in forty-two years; he and Prime Minister Stephen Harper came to agreement on a wide array of issues including energy policy and health investment.

Bonus: Indonesia looks to criminalize alcohol consumption. Introduced first by Islamic parties in 2012, lawmakers from Indonesia’s secular political parties have added their voices in support of a bill prohibiting the consumption of alcoholic beverages in Indonesia. The bill, if fully enacted, would prohibit the sale, production, distribution, and consumption of all beverages containing more than one percent alcohol. According to the draft text, any person consuming alcoholic beverages will face between two and ten years in prison, or a fine up to one billion rupiah ($77,059). Convenience stores have already pulled alcohol from their shelves, sparking fears that the new regulations will hurt tourism in Bali and elsewhere.

Corrections: An earlier version of this article misstated the current month--we are happy to confirm that it is April, not March still--and the title of Francois Hollande of France. He is president, not prime minister.

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