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Asia Unbound

CFR experts give their take on the cutting-edge issues emerging in Asia today.

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Friday Asia Update: Top Five Stories for the Week of August 28, 2015

by Guest Blogger for Elizabeth C. Economy
china-stock-plunge An investor looks at an electronic board showing stock information of Shanghai Stock Exchange Composite Index at a brokerage house in Beijing, August 26, 2015. Asian shares struggled on Wednesday as investors feared fresh rate cuts in China would not be enough to stabilize its slowing economy or halt a stock collapse that is wreaking havoc in global markets. (Jason Lee/Reuters)

Ashlyn Anderson, Rachel Brown, Lincoln Davidson, Lauren Dickey, Ayumi Teraoka, and Gabriel Walker look at the top stories in Asia this week.

1. China’s stock plunge. Chinese stocks plunged this week, with the Shanghai Composite Index falling 22 percent between August 19 and August 24. The market’s drop on what was deemed “Black Monday” erased the gains made over the past year. Until June, the Shanghai Composite Index had risen nearly 150 percent in one year and state media had assured that this was just the start of a bull market. The Chinese market’s tumble rattled stock markets around the world. Read more »

What’s Missing in the China Story?

by Elizabeth C. Economy
Rescue workers wearing chemical protective suits walk at the site of the explosions at the Binhai new district in Tianjin, China, August 14, 2015. Rescuers on Friday pulled one survivor from the wreckage of a warehouse in northeast China's Tianjin that was hit by two massive blasts, a city official told reporters at a briefing. REUTERS/Jason Lee Rescue workers wearing chemical protective suits walk at the site of the explosions at the Binhai new district in Tianjin, China, August 14, 2015. Rescuers on Friday pulled one survivor from the wreckage of a warehouse in northeast China's Tianjin that was hit by two massive blasts, a city official told reporters at a briefing. (Jason Lee/Courtesy Reuters)

Over the past month, there has been a lot of “China drama.” The volatility in the Chinese stock market, the yuan devaluation, and now the Tianjin warehouse explosion have all raised China chatter to a new level of anxiety. Some of the anxiety is understandable. These events have real consequences—above all for the Chinese people. At the urging of the Chinese government, tens of millions of Chinese moved to stake their fortunes not on real estate but on the stock market—the most unfortunate used their real estate as leverage to invest in the market and are now desperate for some good news. The Tianjin warehouse explosion has thus far left 121 Chinese dead, more than seven hundred injured, and over fifty still missing. Globally, the yuan devaluation has triggered a rate rethink by central bankers in Europe and the United States, and the stock market slide has contributed to steep drops in Asian and U.S. markets.

Read more »

Friday Asia Update: Top Five Stories for the Week of August 21, 2015

by Guest Blogger for Elizabeth C. Economy
Bangkok-bombing People pray at the Erawan Shrine, the site of Monday's deadly blast, in central Bangkok, Thailand, August 20, 2015. (Athit Perawongmetha/Reuters)

Ashlyn Anderson, Rachel Brown, Lincoln Davidson, Ayumi Teraoka, and Gabriel Walker look at the top stories in Asia today.

1. Bombing in Bangkok. On Monday evening a bomb exploded within the popular Erawan Shrine in Bangkok, killing at least twenty people and injuring over 120 more. Thai authorities are investigating a suspect identified as a foreigner, who was caught on CCTV footage leaving a large backpack near the shrine, in connection with the blast. Read more »

Friday Asia Update: Top Five Stories for the Week of August 14, 2015

by Guest Blogger for Elizabeth C. Economy
Workers clean a road near the site of the explosions at the Binhai new district, Tianjin, August 13, 2015. Two huge explosions tore through an industrial area where toxic chemicals and gas were stored in the northeast Chinese port city of Tianjin, killing at least forty-four people, including at least a dozen fire fighters, officials and state media said on Thursday. (Jason Lee/Reuters) Workers clean a road near the site of the explosions at the Binhai new district, Tianjin, August 13, 2015. Two huge explosions tore through an industrial area where toxic chemicals and gas were stored in the northeast Chinese port city of Tianjin, killing at least forty-four people, including at least a dozen fire fighters, officials and state media said on Thursday. (Jason Lee/Reuters)

Ashlyn Anderson, Rachel Brown, Lincoln Davidson,  Lauren Dickey, Ariella Rotenberg, and Gabriel Walker look at the top stories in Asia today.

1. China’s central bank allows currency to devalue. The renminbi (RMB) declined by more than 4 percent this week as the People’s Bank of China (PBOC) set the currency’s daily benchmark lower for several days in a row. The drop may help strengthen the domestic economy, which has faltered in recent months; the PBOC’s willingness to allow the currency’s market rate to drop may suggest that the Chinese economy is doing even worse than some indicators suggest, which could spell trouble for countries that rely on China’s commodity imports. Read more »

Friday Asia Update: Top Five Stories for the Week of August 7, 2015

by Guest Blogger for Elizabeth C. Economy
A customer shops at an Alibaba rural service center in Zhejiang province, China, July 20, 2015. While Chinese e-commerce company Alibaba estimates the potential rural market for online shopping at 460 billion yuan ($74 billion) by next year, new regulations on Internet payment tools may limit that. (Reuters/Aly Song) A customer shops at an Alibaba rural service center in Zhejiang province, China, July 20, 2015. While Chinese e-commerce company Alibaba estimates the potential rural market for online shopping at 460 billion yuan ($74 billion) by next year, new regulations on Internet payment tools may limit that. (Reuters/Aly Song)

Rachel Brown, Lincoln Davidson, William Piekos,  Ariella Rotenberg, Ayumi Teraoka, and Gabriel Walker look at the top stories in Asia today.

1. China to embed Ministry of Public Security units in Internet companies. Cybersecurity police units will soon be posted within major Internet companies in China, in order to more quickly and effectively prevent criminal activities such as fraud, online theft, and rumormongering. The move is especially direct for a government that largely expects companies to comply with censorship regulations and already employs millions of microblog monitors. Read more »

Guest Post: Micron Takeover by Chinese Company Raises Cybersecurity and Regulatory Concerns

by Guest Blogger for Yanzhong Huang
Memory chip parts of U.S. memory chip maker MicronTechnology are pictured at their fair booth at an industrial fair in Frankfurt, Germany, July 14, 2015. China's state-backed Tsinghua Unigroup Ltd is preparing a $23 billion bid for Micron in what would be the biggest Chinese takeover of a U.S. company. (Reuters/Kai Pfaffenbach) Memory chip parts of U.S. memory chip maker MicronTechnology are pictured at their fair booth at an industrial fair in Frankfurt, Germany, July 14, 2015. China's state-backed Tsinghua Unigroup Ltd is preparing a $23 billion bid for Micron in what would be the biggest Chinese takeover of a U.S. company. (Reuters/Kai Pfaffenbach)

by Ariella Rotenberg and Peng Di

Ariella Rotenberg is a research associate in U.S. foreign policy at the Council on Foreign Relations. Peng Di, a former intern for the global health program, also contributed to this post.

Just this week, the Obama administration announced publicly that it would retaliate against China for coordinating a cyber attack that resulted in the theft of over twenty million American’s personal information. While attention in the public sphere is currently focused on the administration’s policy reversal, over the course of the past few weeks many technology fiends, finance experts, and cybersecurity analysts turned their attention to the potential buyout of the Boise, Idaho-based Micron Technology Inc. by Chinese company Tsinghua Unigroup. Read more »

How to Make Compromise Compelling: Christensen and Goldstein on U.S.-China Relations

by Elizabeth C. Economy
U.S. President Barack Obama (R) meets China's President Xi Jinping, on the sidelines of a nuclear security summit, in The Hague March 24 2014. Obama began crisis talks with his European allies on Monday after Ukraine announced the evacuation of its troops from Crimea, effectively yielding the region to Russian forces which stormed one of Kiev's last bases there. Obama, who has imposed tougher sanctions on Moscow than European leaders over its seizure of the Black Sea peninsula, will seek support for his firm line at a meeting with other leaders of the G7 - a group of industrialised nations that excludes Russia, which joined in 1998 to form the G8. REUTERS/Kevin Lamarque (NETHERLANDS - Tags: POLITICS TPX IMAGES OF THE DAY PROFILE) U.S. President Barack Obama (R) meets China's President Xi Jinping, on the sidelines of a nuclear security summit, in The Hague on March 24 2014. (Kevin Lamarque/Courtesy Reuters)

Sitting on the beach—or less fortuitously in an office—with nothing better to do in the last weeks of summer than read a few books on U.S.-China relations? You might want to pick up the new books by Thomas Christensen and Lyle Goldstein, The China Challenge: Shaping the Choices of a Rising Power and Meeting China Halfway: How to Defuse the Emerging U.S.-China Rivalry, respectively. They are not light reading, but they will situate you well for the barrage of media attention sure to accompany the late September summit between Presidents Xi and Obama. Read more »

Friday Asia Update: Top Five Stories for the Week of July 31, 2015

by Guest Blogger for Elizabeth C. Economy
The Chinese People's Liberation Army (PLA) Navy guided missile destroyer Haikou (171) arrives at the Joint Base Pearl Harbor Hickam to participate in the multi-national military exercise RIMPAC 2014, in Honolulu, Hawaii, June 24, 2014. (Hugh Gentry/Reuters) The Chinese People's Liberation Army (PLA) Navy guided missile destroyer Haikou (171) arrives at the Joint Base Pearl Harbor Hickam to participate in the multi-national military exercise RIMPAC 2014, in Honolulu, Hawaii, June 24, 2014. (Hugh Gentry/Reuters)

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

1. China conducts live fire drills in the South China Sea. More than one hundred naval vessels, dozens of aircraft, and units from China’s information warfare forces and missile corps participated in the live fire exercises Tuesday, which one Australian expert called a “needlessly excessive show of force.” Read more »

Friday Asia Update: Top Five Stories for the Week of July 24, 2015

by Guest Blogger for Elizabeth C. Economy
Chinese nationals, believed to be involved in illegal logging, arrive at a court in Myitkyina, capital of Kachin State in the north of Myanmar, July 22, 2015. China has lodged a diplomatic protest with Myanmar after a court in the southeast Asian nation sentenced 153 Chinese nationals to life imprisonment for illegal logging. The Myitkyina court handed down sentences to 155 Chinese citizens on Wednesday. Two of those convicted escaped life sentences and got 10-year prison terms. All will have a chance to appeal against the rulings, said a court official, who declined to be identified as he was not authorized to speak to the media. Picture taken July 22, 2015. (Stringer/REUTERS) Chinese nationals, believed to be involved in illegal logging, arrive at a court in Myitkyina, capital of Kachin State in the north of Myanmar, July 22, 2015. (Stringer/Reuters)

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

1. Former Hu Jintao aide arrested on corruption charges. The Chinese Communist Party (CCP) Politburo announced on Monday that Ling Jihua, a former high-ranking official in the Hu administration, had been expelled from the party and placed under arrest. He awaits trial on charges of giving and receiving bribes, illegally obtaining state secrets, and violating party discipline rules. State media also noted that Ling “traded power for sex” and “should bear major responsibility for his family members” using his position to personally profit—although that hasn’t spared his relatives from also coming under investigation. Read more »

How Will China’s Stock Market Drop Affect Policy?

by Joshua Kurlantzick
China-stock market Investors look at computer screens in front of an electronic board showing stock information at a brokerage house in Shanghai, China, on July 14, 2015. (Aly Song/Reuters)

As China’s markets have melted down over the past month, wiping out over three trillion in wealth, some Chinese and foreign analysts, investors, and politicians have seen an upside in the market’s downturn. The fall of the overheated stock market might force the state to both clean up both the unregulated loans fuelling purchases and, more broadly, intervene less in equity markets and the broader economy. The market drop, according to this theory, might even foster massive discontent with the Communist Party and support for real political reforms, since unlike in most major economies it is not large institutions but retail investors—ninety million or so—who dominate Chinese investing. Read more »