Choppy waters in the South China Sea

Insight: Stakes are high in the South China Sea. Rich in natural resources, a key trade route and a key strategic and military position, it is no wonder that multiple countries are deeply involved in geographical ownership disputes -- including mainland China, Taiwan, the Philippines and Vietnam. A recent conflict between Chinese and Philippine soldiers in the Second Thomas Shoal has led the two countries to try to reach a consensus of ‘do’s and don’ts’ while resupplying their respective bases. Yet tensions are running high once more with China accusing the Philippines of going back on its word to allow prior notification and on-site confirmation. 

Impact: While the South China Sea is economically critical for several Southeast Asian countries, it is just as important for China as a crucial buffer zone against external threats. The US and key regional allies including the Philippines, Japan and Australia have all condemned China’s expansion tactics in the region, while Beijing is worried about being encircled and contained. The US has already promised Manila $500 million to boost its military capabilities, and the Philippines has announced plans to develop an airport on a neighbouring island. The key is for all sides is to balance securing their strategic interests against escalating further conflict 

58 million

The number of global views Philippine girl band Bini’s music video “Pantropiko” has racked up. While K-pop took the world by storm in the first few years of the 2020s, usurping J-pop as the music of Asia, it looks like Phil pop could be in line as the region’s next big cultural ‘export du jour’.

Insight: Mitsubishi Motors is joining the strategic partnership between Honda and Nissan to gain economies of scale and speed up new model development. The move effectively divides Japan’s auto industry into two camps: this trio, with combined annual sales of 8.3m vehicles and the Toyota group, including Mazda, Subaru and others, with around 16 million. 

Impact: While this three-way alliance has good, old-fashioned industrial logic it is not aimed at catching up with Toyota or even cementing share in their domestic market. Rather it betrays anxiety among Japan’s carmakers about how far they have fallen behind Chinese rivals and Tesla in the development of electric vehicles. Granted, EV demand is currently sluggish outside China, but it is the future of the industry, and the trio are pooling resources to catch up in EVs, their batteries and software – an expensive business. 

Insight: Nike found itself in hot water on Chinese social media again -- this time with a global promotional video that featured an apparently Chinese model licking a ping pong paddle. Netizens criticized the US sportswear group for an inappropriate and disrespectful representation of Chinese athletes. Nike has been slowly rebuilding its brand in China after being embroiled in a social media crisis over Xinjiang-sourced cotton. However, this latest incident once again suggests that all too often international brands misunderstand the values and sensitivities of the Chinese consumer. 

Impact: Luckily for Nike, the ‘licking controversy’ seems to have been limited to online discussion, with no significant impact on its reputation or sales – at least so far. Some netizens even argued that sportsmanship can be expressed in many ways, and that licking is a harmless show of passion. Other brands have not been as lucky. Luxury fashion house Dolce & Gabbana is still recovering from its controversial ad in 2018 showing a Chinese model learning how to use chopsticks to pick up foods like pizza and cannoli. The brand recently selected a Chinese Canadian designer for its global talent program, which was criticized by some netizens as a futile attempt to become more culturally relevant in China. 

FGS Global has published its latest insights into the US presidential election.

Insight: The past couple of weeks have been unprecedented, even by US political standards, with the assassination attempt of Donald Trump, his choice of controversial running mate JD Vance and then President Joe Biden’s decision to step aside for Vice President Kamala Harris. Recent opinion polls suggest that voters on both sides are more energized than ever and that the race is back in a dead heat as we head toward November 5. 

Impact: For Asia, the prospect of a competitive presidential race brings greater short-term uncertainty but also the prospect of more long-term stability since a President Harris is likely to act more rule-bound and less transactional than a term-limited President Trump. Most importantly, her administration would continue to be a reliable partner to key allies like Japan and Australia while continuing to be tough on China. Among all of 2024’s many elections, this one is not only the most important; it is also turning out to be the most unpredictable. 

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