Year of Turbulence

Flying through the Covid cloud has been hard enough, and then there’s the added drama of dealing with the lengthening shadow of China across the region.

Pandemic drags on recovery: In the early stages of the Covid-19 pandemic in 2020, many Asian countries had enviable success, avoiding large-scale outbreaks and mass deaths. But the arrival of the more transmissible Delta variant this year and sluggish vaccine rollouts compounded by low availability sent cases surging. Combined with poor monitoring and easy movement among countries, often unofficially, Southeast Asia became a virus hotspot. The ballooning health crisis collided with churning political discontent in the case of Myanmar, Thailand and Malaysia. Economically, the new wave of infections, and attendant restrictions imposed to curb the spread, stalled recoveries. After nearly two years of strict border controls, many countries started to loosen up and live with Covid. But the rise of the Omicron variant now threatens to scuttle those tentative reopening plans and usher in a third year of economic anxiety.


No one doubts the rapid expansion of China’s economic and political footprint across the world. Even countries with relatively strong institutions, notably the US and Japan, have struggled to grapple with the implications. In Asia, China’s profile has expanded unusually quickly. Beijing claims Taiwan as its own and has vowed to bring the island under Chinese control, by force if necessary, resulting in escalating tensions across the Taiwan Strait. In Hong Kong, Beijing has crushed almost all opposition and systematically dismantled human rights since the imposition of the draconian National Security Law in mid-2020. Domestically, allegations of mass internment, forced labour and other abuses committed against Muslim Uighurs in Xinjiang have led many Western nations to accuse Beijing of genocide. The Beijing Winter Olympics are still going ahead in February, but many countries including the US won’t be sending officials in a protest against China’s human rights record.


After a Covid-linked delay of one year, the Summer Olympics finally opened on July 23, 2021, still using the name Tokyo 2020 for branding purposes. While some previous Games had been cancelled, it was the first time the international sporting event had been rescheduled. Athletes competed largely before empty seats as pandemic restrictions remained in effect, but in the end the events came off largely without incident. Despite losing out on ticket sales, organisers said they had saved cash by simplifying events and avoiding the cost of hosting millions of fans. Officials estimated the final total cost of staging the Olympics and Paralympics at US$12.7 billion, down from the pre-Games budget of $14.3 billion.

Fumio Kishida became Japan’s 100th prime minister following the abrupt resignation of Yoshihide Suga, who had lost support due to his administration’s poor response to the “fifth wave” of Covid infections. The 64-year-old former minister of foreign affairs is a skilled communicator and had long been considered a potential future leader. Mr Kishida sought the presidency of the ruling Liberal Democratic Party (LDP) in 2020 but lost to Mr Suga. This year he got another chance and prevailed in a second-round run-off. He subsequently led the LDP to victory in the 2021 general election in October.


For just the third time in its 100-year history, the Central Committee of the Chinese Communist Party adopted a “historical resolution”, this time to document the achievements of Xi Jinping. He now joins Mao Zedong and Deng Xiaoping in the pantheon of leaders seen as having had an extraordinary role in shaping their party and the country. Mr Xi became general secretary in 2012 and president a year later. In March 2018, the party approved the removal of the two-term limit on the presidency, effectively allowing Mr Xi to remain in power for life, which he shows every intention of intending to do.

China has been on a months-long regulatory crackdown aimed broadly at its internet giants, through legislation on issues ranging from anti-monopoly to data security. The moves have sent investors scrambling and erased tens of billions of dollars from the wealth of tech tycoons. Alibaba kingpin Jack Ma has all but disappeared from the public eye as he and others adjust to the new regime. Also in the crosshairs is the US$150-billion private education industry, as authorities clamp down on capitalist excess and promote “common prosperity”. Cram schools and test-prep companies are now racing to find new business models. The property industry, meanwhile, continues to give regulators sleepless nights. China Evergrande Group, which owes more than $300 billion, defaulted on some obligations and has now entered a debt restructuring process in which Chinese authorities will be calling most of the shots. Saving Evergrande may even include selling more of its founder’s personal assets.


Chinese President Xi Jinping declared himself delighted after a drama-free election in December installed a legislature full of Beijing loyalists in Hong Kong. “Hong Kong has been restored from the chaotic condition and is developing in a good direction,” Xi told the territory’s chief executive, Carrie Lam, when she visited Beijing. Only 30% of the electorate cast ballots in the Dec 19 poll, in which just 20 of the 90 legislators were directly elected, and even they were vetted for their patriotism. Ms Lam brushed off Western countries’ complaints, saying: “We cannot copy and paste the so-called democratic system or rules of the Western countries.”


The scale and frequency of incursions by Chinese warplanes into Taiwan’s air defence zone is increasing, with 159 sorties in November alone, according to a database kept by AFP, as Beijing continues to pile military pressure on the island. The rhetoric from the mainland has grown more bellicose ever since the election in 2016 of President Tsai Ing-wen, as she rejects Beijing’s stance that the island is part of “one China”. While the United States and its allies believe a Chinese invasion of Taiwan is unlikely, the Pentagon is reinforcing deployments and bases directed at China, and upgrading and expanding military facilities in Guam and Australia.


Malaysia in August got its third prime minister in just 18 months. The appointment of Ismail Sabri Yaakob marked the return of the pro-Malay party that had ruled the country for decades before suffering setbacks at the polls in 2018. A longtime member of the United Malays National Organisation (Umno), he managed to secure the support of 114 lawmakers in the 220-member lower house of parliament in August. His appointment by the country’s king capped weeks of political upheaval, which had prompted Muhyiddin Yassin and his entire cabinet to resign after just 17 months in office amid mounting anger over his handling of the pandemic and the economy.


Like many other countries, Vietnam has found itself spending heavily to shore up a Covid-battered economy. Consequently, it is considering raising the ceiling on its public debt from the current level of 60% of gross domestic product. “If not … there will not be sufficient resources for growth,” Investment Minister Nguyen Chi Dung told the National Assembly. GDP contracted 6.2% year-on-year in the third quarter of 2021 as pandemic restrictions hit. Many of those restrictions have now been eased but millions of workers who fled the cities for their rural homes have been slow to return, raising further concerns about economic revival.


From bad to worse: Myanmar enters 2022 with an economy in freefall — the World Bank has forecast GDP will contract 18% in 2021 — as a consequence of the Feb 1 military coup. Since then, the military has been accused of killing at least 1,300 unarmed civilians and imprisoning thousands more who opposed the overthrow of the elected government. A growing number of civilians are taking up arms alongside ethnic armed militias that have long challenged the Tatmadaw. The coup leader, Senior Gen Min Aung Hlaing, initially promised elections within one year, but now says the state of emergency will remain until at least August 2023. A military-appointed court, meanwhile, has convicted former state counsellor Aung San Suu Kyi, 76, of inciting dissent and breaking Covid rules. Those are just the first of many charges — most of them deemed bogus by rights groups — against the democracy icon.


Prime Minister Narendra Modi in November announced the repeal of three controversial farm laws after a year of sometimes violent farmers’ protests. Farmers complained the laws would chip away at state price guarantees, allow the entry of private players and hurt their income. Thousands had camped at Delhi’s borders since November 2020 and dozens died from heat, cold and Covid. Mr Modi’s surprise announcement marked a major U-turn as the government had made little attempt to talk to farmers. A new panel of growers and government officials is now working to create a better and more inclusive system of price supports.

India has deployed US-made weaponry along its border with China, seeking to bolster its capabilities as the two Asian giants’ decades-long deadlock continues over disputed territory in the Himalayas. The buildup in India’s northeast is centred on the Tawang Plateau adjoining Bhutan and Tibet, an area claimed by China but controlled by India. Tensions rose after India in 2019 revoked the semiautonomous status of Jammu & Kashmir and split it into two union territories: Ladakh and Jammu & Kashmir. Despite the military standoff, trade between China and India is on course to exceed a record US$100 billion this year.


The seven-member Bangtan Boys — officially known as BTS — continue to transform the image of boy bands and shatter conceptions of what breakout success looks like for K-pop artists globally. In July President Moon Jae-in named the band a Special Presidential Envoy for Future Generations and Culture. In that role they are helping to raise awareness of global issues such as sustainable development, strengthen the nation’s diplomatic standing and represent South Korea at international events, including the UN General Assembly. Featured on the international cover of Time as “Next Generation Leaders”, BTS also appeared on the magazine’s list of the 100 most influential people in the world in 2019.

Almost as big as BTS has been Squid Game, released worldwide on Sept 17 to critical acclaim and international attention. The dystopian Korean TV series on Netflix revolves around a contest in which 456 players, all of them deeply in debt, play a series of deadly children’s games for the chance to win 45.6 billion won (US$39 million). As of November it was the most-watched series in the history of Netflix, becoming the top-viewed programme in 94 countries, attracting 142 million member households and amassing 1.65 billion viewing hours during its first four weeks. The show’s creator was initially undecided about a second season but now he is working on one.


Australia formally embarked on a hotly contested programme to equip its navy with nuclear-powered submarines under a new defence alliance with Britain and the United States. China was vocal in its contempt for the trilateral security pact known as Aukus, accusing the three western powers of having a “cold-war mentality”. Many observers view it as partly a response to China’s status as an increasingly assertive superpower. The creation of Aukus also stirred anger in France, which briefly recalled its ambassadors from Australia and the US following Canberra’s abrupt cancellation of a deal wt acquire French non-nuclear subs worth €56 billion (US$63 billion).

Tensions between Australia and its largest trading partner, already rocky after Australia banned the Chinese telecoms giant Huawei from its 5G wireless network in 2018, worsened after Canberra called for an international inquiry into the origins of the coronavirus, which was first identified in Wuhan. Beijing responded by imposing tariffs on Australian wine and barley and limited imports of Australian beef, coal and grapes. The World Trade Organization has established a dispute-settlement panel to address Canberra’s complaint over Chinese anti-dumping duties on imports of wine.


Salary increases in Indonesia are on track to rebound to pre-pandemic levels next year as the economy recovers and employers beef up their workforce, a recent survey showed. Median pay hikes in Southeast Asia’s largest economy are forecast to hit 6.5% in 2022, well above the 5.3% registered this year but slightly under the 6.9% in 2019, according to a survey of 533 organisations by the human resources firm Mercer. “Employment recovery is gathering pace with the reopening of economic and social activities, and the future for Indonesia’s job market looks bright,” said Yosef Budiman, Mercer career products manager in Jakarta. “Companies are in a better position to hire while employees have more options when they consider switching jobs.” High-tech and internet companies will offer the highest median salary increases at 7.3% given high demand and stiff competition for talent.


Praised as one of the world’s Covid success stories, New Zealand has tackled rounds of the outbreak with tough border controls and strict lockdowns. The Kiwis are one of the few nations, along with China, still pursuing a “zero Covid strategy”. A cautious plan was announced in November for a staged reopening of the international border, which has been closed since March 2020. The first beneficiaries were to be New Zealand citizens and visa holders coming from Australia, starting on Jan 17, then from the rest of the world, and finally all other vaccinated visitors from the end of April. Then came Omicron, and now the first phase has been put back to the end of February.


Fast track to debt: Laos opened a new US$6-billion rail link with China to much fanfare this month, but the party could be short-lived as the government grapples with a potential debt crisis. The line connects Vientiane with the southern Chinese city of Kunming, and there are grand plans for a high-speed rail network running to Singapore through Thailand and Malaysia. The government hopes the railway will turn a profit by 2027, but the Chinese loans to pay for it could be unsustainable. With a tiny domestic market, there is “limited commercial logic for an expensive railway” to connect the country of 7 million to Kunming, a report by the Asian Development Bank Institute said.


The Singapore government is seeking to adjust foreign worker policies to address concerns among locals over competition for jobs, even as the global business hub remains open to talent from overseas. “We have to adjust our policies to manage the quality, numbers and concentrations of foreigners in Singapore,” Prime Minister Lee Hsien Loong said in his National Day message in August. Foreign labour has long been a hot-button issue, but uncertainties due to the pandemic have increased employment worries among locals. Just under 30% of Singapore’s 5.7 million population are non-residents, up from 10% in 1990. But Mr Lee warned that turning inward would damage the city-state’s standing as a global and regional hub. His government has been tightening foreign worker policies for several years while taking steps to promote local hiring, including by raising the salary threshold for issuing work permits.


Three decades after a landmark agreement ended years of bloody violence in Cambodia, its strongman ruler has crushed all opposition and is eyeing dynastic succession, shattering hopes for a democratic future, critics say. The Paris Peace Agreements, signed on Oct 23, 1991, brought an end to nearly two decades of savage slaughter that began with the ascent to power of the Khmer Rouge in 1975. The pact paved the way for a democratic election in 1993 and effectively brought the Cold War in Asia to an end. Aid from the West flowed in and Cambodia became the poster child for post-conflict transition. But the gains were short-lived and Prime Minister Hun Sen, now in his fourth decade in power, today presides over a one-party government. This month he confirmed that he has a succession plan, and to no one’s surprise it involves his son.


Former Philippine senator Ferdinand Marcos Jr, son of the late dictator, is leading by opinion polls wide margin as the country gears up for presidential elections in May 2022. A survey in December by Pulse Asia Research showed Mr Marcos chosen by 53% of the 2,400 respondents as their preferred successor to President Rodrigo Duterte. Vice President Leni Robredo, the opposition leader, came a distant second with 20%. But Mr Marcos faces several petitions to disqualify him or cancel his presidential bid, mostly citing his tax conviction in 1997. His running mate — the current president’s daughter, Davao City Mayor Sara Duterte — is leading the vice-presidential race with 45% of respondents supporting her.