Briefing MONTHLY #84 | May 2025

When Indonesian President Prabowo Subianto made an unscheduled visit to Anthony Albanese’s Jakarta hotel ten days after the federal election, the prime minister could celebrate being a winner at home and abroad.

While some Australian voters might still be pondering the real meaning of Labor’s historic victory given how close opinion polls were early in the campaign, Prabowo’s unusual drop-in shows that Asian leaders are more likely to accept at face value they will be dealing with a lengthy interregnum of Labor foreign policy.

In the stylised world of diplomacy winners certainly are grinners as Prabowo was only too keen to show: “Prime Minister Albanese was the first world leader to extend congratulations to me upon my election as President of the Republic of Indonesia. And, when I heard that he had won, I also called him right away - though I don’t know if I was the first.”

But Albanese also won what amounted to a foreign policy election at home as Australia’s multicultural communities increasingly exert their influence in politics. Labor fended off a mooted challenge from Muslim voters over its position on the Gaza conflict while holding its seats with significant Jewish populations. More significantly, it extended its hold on seats with significant Chinese-Australian residents that it established in the 2022 election.

Indeed, there are now more Federal Parliament members with an Asian heritage than ever with 15 Senators and Members led by Labor’s now 10 member Asian sub-faction. See ASIAN NATION.

Meanwhile, as Australians contemplate two more terms of Labor government, Asia’s parallel elections this month have also produced their own unexpected results.

Relatively new Singapore Prime Minister Lawrence Wong – who Albanese briefly met on the return leg of his Jakarta/Rome trip – has managed to stop the trend decline this century in support for the long-ruling Peoples Action Party. In the Philippines, President Ferdinand Marcos Jr. has lost support in the country’s crucial Senate election to candidates aligned with his two predecessors – the populist Rodrigo Duterte and the liberal Benigno Aquino. See NEIGHBOURHOOD WATCH

This is my last Briefing MONTHLY for some time after more than seven years here charting Australia’s rollercoaster integration with changing Asia. My former colleague from both The Australian Financial Review and the Lowy Institute’s The Interpreter, Emma Connors, is taking over. Thanks for reading.

Greg Earl
Briefing MONTHLY editor

Southeast Asian leaders have sought new economic ties with China and the wealthy Gulf states in their first strategic shift since the Trump Administration tariff upheaval.

Representatives of the ten ASEAN countries, the nine Gulf Cooperation Council (GCC) countries, and China established a working group on economic cooperation on the sidelines of the regular ASEAN summit in Kuala Lumpur this week. It followed some fragmented responses by the Southeast Asian countries to the Trump trade changes.

In an echo of China’s Belt and Road Initiative, they agreed to prioritise large-scale infrastructure, logistics and supply chain development and joint research on advanced nuclear reactors, low-carbon technologies and renewable energy.

Speaking ahead of the meeting Malaysian Prime Minister and ASEAN chair Anwar Ibrahim said: “From the ancient Silk Road to the vibrant maritime networks of Southeast Asia to modern trade corridors, our peoples have long connected through commerce, culture and the sharing of ideas.”

The ASEAN meeting also agreed to a revamped regional trade agreement to reduce internal trade barriers and brought forward Timor Leste’s entry to the group to next October. See ASEAN: all for one below.

For a leader self-declared as inclined to stay out of foreign conflicts, US President Donald Trump seems to have become a victim of friendly fire in the conflict between India and Pakistan over Kashmir.

His announcement that the White House brokered a ceasefire in three days of spiralling conflict after a terrorist attack in Indian-managed Kashmir has left India seething about the intervention while Pakistan has basked in rare apparent parallel support from both the US and China.

The two countries have a long history of hostilities over divided Kashmir, but this was the worst in decades with both sides claiming success from unusual deep attacks into each other’s territory.  Around 51 Pakistani and 16 Indian deaths have been reported.

But the ceasefire has left many issues:

Meanwhile, India’s suspension of a 65-year-old water treaty with Pakistan that has survived past conflicts foreshadows how climate change may be a more serious cause of tensions in future.

It’s three years until the next presidential election in the Philippines but the contest is now on earlier than expected with incumbent President Ferdinand Marcos Jr. suffering election blows from three very different rivals.

Marcos, who won the 2022 election more strongly than many expected, has settled into his father’s old job smoothly since then tilting the Philippines back towards the US in security policy, boosting its attraction as an investment destination, and breaking with former President Rodrigo Duterte and his daughter Sara, the incumbent vice-president.

But in the key contest for half the Senate seats in this month’s mid-term election, Marcos’ candidates have not done as well as opinion polls projected. Instead, candidates aligned with the Dutertes and the pre-Duterte liberal President Benigno Aquino have led the Senate voting. At the same time Marcos’ seemingly estranged sister Imee has been re-elected.

The mid-term Senate contest for 12 out of 24 seats has signalled poor re-election or succession prospects for previous presidents.  Marcos cannot stand again due to a term limit but is pushing his cousin House Speaker Martin Romualdez as his successor.  But before then the new Senate will be conducting a Marcos-backed impeachment trial of Sara Duterte, which would preclude her from running as president in 2028.

While loyalties are flexible, the Marcos and Duterte camps have each won about four of the 12 seats. Two liberal candidates associated with the Aquino family and former vice-president Leni Robredo who Marcos defeated in 2022 won seats surprisingly strongly and then Imee Marcos and another quasi-independent woman won two seats.

While the situation remains flexible, it seems likely that Marcos’ failure to do very well, will discourage Senators from taking Sara Duterte and her family out of the 2028 election alliance manoeuvring via an impeachment.   

Singaporeans have joined the tentative global trend towards voters backing incumbent governments in response to the uncertainty surrounding in the Trump Administration by giving the People’s Action Party a stronger mandate.

Relatively new Prime Minister Lawrence Wong managed to boost the PAP vote share to 65.6 per cent (compared with 61.2 per cent in 2020) on May 3 possibly halting a slightly downward electoral trend this century for the party that has run the country since 1965. The party retained 87 seats in the 97 seat Parliament.

The election saw the oldest opposition group the Workers Party retain its ten seats and also win an increased vote share at the expense of the other smaller opposition parties, some of which had once been seen as more promising longer term opposition forces. So, the Workers Party seems to have cemented itself as the main opposition but perhaps boxed in to a limited role in the Parliament by the way electoral boundaries have been managed.

The win will give Wong more capacity to escape the shadow of the Lee family’s long dominance of the country’s politics and focus on the challenges to Singapore’s open trade entrepot economy from the fragmentation of the global trade system. This has also been aided by the way several older PAP ministers retired at the election and about half of its new candidates were in their 30s in a bid to appeal to younger voters.

One of Wong’s biggest challenges will now be how to respond to voter demands for more protection of jobs for local people during a cost-of-living crisis when Singapore has traditionally relied on foreign workers to maintain its competitiveness.

Despite widespread calls for Asian countries to take a more integrated approach to the Trump Administration’s changing tariff policies, most countries are taking their own disparate steps.

China: Slowly, slowly A truce rather than peace is prevailing in the US/China trade war with the US reducing China tariffs from 145 per cent to 30 per cent, and China cutting US tariffs from 125 per cent to 10 per cent. The unexpectedly fast and substantial pause on May 12 was accompanied by US President Donald Trump saying he was “not looking to hurt China”. Comments from US Treasury Secretary Scott Bessent about the need for a broader financial rebalancing with China suggest any settlement will take some time possibly beyond the 90-day pause. Meanwhile many analysts say China was better prepared for the standoff and is less dependent on the US than vice versa.

Japan: Money talks As Japan fears being the loser from US-China negotiations despite being a longstanding US partner, it’s Finance Minister Katsunobu Kato has taken the unusual step of publicly identifying the country’s more than US$1 trillion holdings of US Treasuries as a “card” in its tariff negotiations with the Trump administration. The Japanese government has announced a US$6 billion emergency spending package to offset the impact of the tariffs.

India: iPhone call Apart from the tensions with India over Kashmir, the Trump Administration has undermined India’s quest to be a manufacturing hub by opposing Apple’s plan to switch iPhone manufacturing from China to India. Trump says told Apple chief executive Tim Cook: “We put up with all the plants you built in China for years ... we are not interested in you building in India, India can take care of themselves, they are doing very well.”

ASEAN: all for one Malaysian Prime Minister Anwar Ibrahim, who is the current ASEAN chair, has requested a US-ASEAN leaders summit in October to resolve US tariff threats against Southeast Asian countries, which would in effect push back the 90-day US tariff pause even further. But with ASEAN countries amongst the hardest hit by the tariff plan, most countries have been trying to cut their own deals while warning they may also be pushed into further economic integration with China.   

For example, Vietnamese officials have signalled they will meet with Trump Organisation representatives, including Trump’s sons, over their plans for real estate investments in Vietnam. Indonesia says it will reduce some of its local content requirements to allow the purchase of more US goods. Thailand’s PTT says it is considering buying more liquified natural gas from the US.

Prime Minister Anthony Albanese has raised the prospect of even closer defence and security ties with Indonesia on his first overseas visit since his re-election raising the prospect he wants to exceed the ultimately ill-fated security agreement signed by his predecessor Paul Keating in 1996.

“I want us to aim higher, go further and work even more closely together – and I see President Prabowo (Subianto) as a leader with the vision and determination to make that happen,” Albanese said in relation to a defence cooperation agreement signed last year.

Albanese second term decision to visit Indonesia first hardened up the modern common practice of prime ministers making their first bilateral overseas trip to the country. It also marked a contrast to former opposition leader Peter Dutton backing away from that tradition during the election campaign.

Prabowo, a more westernised English-speaking leader than his predecessors, added his own personal tradition to this complex relationship by dropping into Albanese’s hotel on arrival.

Albanese kept the bromance going by strongly backing Indonesia’s bid to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement after their formal meeting in contrast to taking a seemingly more neutral position on the issue at his arrival media conference.

Last year Australia led the way in backing Indonesia’s as yet uncompleted bid to join the Organisation of Economic Cooperation and Development, but Prabowo’s Administration shifted course to join the notionally anti-western BRICS (Brazil, Russia, India, China and South Africa) group first.

The key points:
Defence: Australia is spending $15 million on maritime cooperation, 3.5 million on an anti-malarial trial in the Indonesian military, and will support Indonesian military training in the Northern Territory.

Trade: The five-year old lndonesia-Australia Comprehensive Economic Partnership Agreement will be reviewed.

Healthcare: Hospital projects in Samarinda, East Kalimantan and Bali involving Australian investors were noted underlining Australia’s increased focus on healthcare provision in Indonesia.

Electric cars: The statement said officials were asked to keep working on critical battery and electric vehicle cooperation suggesting there has been only modest progress since Albanese and former President Joko Widodo said it was a top priority.

Language: Australia is doubling the Indonesian Language Learning Ambassadors program, which places Indonesian scholars into Australian schools and universities.

Investment: Australia will support sovereign wealth fund Danantara joining the International Forum of Sovereign Wealth Funds and cooperating with Australia’s Future Fund. They welcomed the opening of PT Bank Negara Indonesia in Sydney to facilitate increased trade and investment.

After complicated debates about distinguishing between the Peoples Republic of China and the Chinese people and balancing acts over Australia’s economic and security partners, Chinese Australians appear to have spoken loud and clear at the election.

Going into the 2019 election, the Liberal-National Party coalition held seven of the 10 seats (all in Melbourne and Sydney) with the most Chinese heritage residents. After this month’s election that is down to two – Berowra and possibly Bradfield in northern Sydney. The average primary vote swing to Labor in the 10 seats which have at least 17 per cent Chinese ancestry residents was 4.7 five per cent or more than twice the national average.

There are about 1.4 million Australians with Chinese heritage, including about one million born abroad of which more than half were born in mainland China. But not all are eligible to vote.

The election saw former opposition leader Peter Dutton oscillating between talking up the value of the local ethnic Chinese communities and warning about China being the biggest threat to Australia. But the then Opposition election eve warnings about Chinese government sponsored operatives campaigning for some non-Liberal candidates is seen as a key tipping point for ethnic Chinese voters.

Labor appears to have been rewarded by ethnic Chinese voters for its gradualist policy of cooperating with China where it can and disagreeing where it must, while the Coalition has lost the confidence of a growing part of the population for more mixed messages about the Chinese government and the local ethnic Chinese community.

The Liberal Party used to have a strong claim on Chinese voters underlined by how the first Chinese-Australian elected to any Parliament was Hong Kong-born Helen Sham-Ho as a Liberal in the NSW Parliament in 1988. Mainland born Tsebin Tchen was the first ethnic Chinese person to serve in the Federal Parliament as a Victorian Liberal senator in 1998.

But Labor will now have six MPs with some Chinese ancestry in its federal ranks after the election, led by Foreign Minister Penny Wong who was the only Chinese background Labor MP in 2019.

They are pre-existing MPs Sally Sitou (Reid, NSW) and Sam Lim (Tangney, WA) along with the newly elected MPs Zhi Soon (Banks, NSW); Julie-Ann Campbell (Moreton, Queensland); and Gabriel Ng (Menzies, Victoria).

Labor now also has four federal MPs of south Asian descent in incumbents Cassandra Fernando (Holt, Victoria) from Sri Lanka; Zanetta Mascarenhas (Swan, WA) from India; Varun Ghosh (WA Senator) from India; and newcomer Ash Ambihaipahar (Barton NSW) from Sri Lanka.

The conservative parties have two MPs of Indian background in NSW Senator Dave Sharma and newly elected Leon Rebello (McPherson, Qld). The Greens have a Pakistan background Senator in Mehreen Faruqi and former Labor Senator turned Independent Fatima Payman is from Afghanistan.

So, on balance there are now six MPs of Chinese background and eight from a South Asian background although the ethnic Chinese community is still older and more populous than the South Asian community, which has been growing faster in recent years.

Incumbent Independent Vietnamese MP Dai Le (Fowler, NSW) was returned to Parliament with a small increase in support after an unusual diaspora election battle with Labor’s fellow Vietnamese candidate Tu Le. Tu Le was pushed aside in 2022 in favour of former NSW Labor Premier Kristina Kenneally who went on to lose to Dai Le.

However, most of Labor’s ethnic Chinese MPs can also be seen as Southeast Asian background MPs depending on how they are classified. Wong hails from Malaysia; Sitou’s parents were from Laos; Lim and Soon are from Malaysia; and Ng is of Singaporean heritage.

This is now a record number of Federal MPs from an Asian background and possibly the largest number ever from a non-Anglo background. However, they still only account for about seven per cent of the Federal Parliament compared with about 17 per cent of the population.     

The key ministers dealing with Asian issues are largely unchanged in the new Albanese government with Foreign Minister Penny Wong and Trade and Tourism Minister Don Farrell remaining in their jobs. Richard Marles, who has a long-standing interest in the Pacific, remains Deputy Prime Minister and Defence Minister.

But the more junior ministers and assistant ministers have been shuffled significantly perhaps adding slightly more heft to the international relations team.

Former minister for defence industry, Pacific affairs and international development Pat Conroy has been reappointed to the former two jobs but the international development role has been given to Anne Aly, the former early childhood development and youth minister.  Aly, an Egyptian born former academic from Western Australia, has also been appointed to the Cabinet where she will be the government’s most senior Muslim. However, she will also be the small business and multicultural affairs minister, which is likely to mean Conroy will retain considerable influence over Pacific aid matters.

This is the first time that the aid and Pacific responsibilities have been separated since 2007. It may suggest Conroy had too much to do given the government’s defence industry building challenges. Aly will be confronted with a new dilemma of whether Australia’s reduced aid budget is mostly all about the Pacific or whether it has a broader international relations role.  

Matt Thistlewaite, a former NSW Labor state secretary, has been appointed assistant Minister to both Wong and Farrell which can be seen as another move towards integrating international relations policy under the government’s statecraft rubric. He was previously an assistant minister for immigration.

Meanwhile Nita Green, a former Queensland union lawyer, has been made the assistant minister to both the tourism and Pacific island affairs ministers once again potentially joining up these international relations positions.

Tim Watts, the former assistant foreign minister who filled in for Wong in some more distant parts of the world including Africa, has become the main loser from this reshuffle and will now serve as the special envoy for Indian Ocean affairs.

Wong used her first speech in her second term as foreign minister in Fiji to talk up the government’s commitment to ending the cultural wars over climate change suggesting that remains a point of tension in relations with Pacific countries.  

Trade Minister Don Farrell has warned that Australia will not bend to any Trump Administration pressure to reduce China trade as the Reserve Bank of Australia (RBA) says China has the upper hand in the tariff showdown with the US.

Farrell says the government is reluctant to become involved in rebalancing trade away from China because Australian exports to China ($212 million in 2023-4) are worth much more than with the US ($37 billion).

“China is our largest trading partner. We don’t want to do less business with China, we want to do more business with China,” he told The Australian Financial Review in one of hist first interviews since being reappointed trade minister. “We’ll make decisions about how we continue to engage with China based on our national interests and not on what the Americans may or may not want.”

But he refused to comment on China joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership free trade deal, just as Prime Minister Anthony Albanese declared Australia’s support for Indonesia becoming a member of that group. China has subsequently sought the same status as Indonesia.

Meanwhile RBA deputy governor Andrew Hauser says China is well positioned to withstand US tariff increases and the Chinese economic agencies would deliver enough economic stimulus to meet the Chinese government’s five per cent annual growth target.

“For anyone wanting to cut to the chase, or, in the words of the Mandarin saying, ‘open the door and see the mountain’, I’ll put it more bluntly: don’t count China out,” Hauser said in a speech after visiting China. Underlining the importance of Chinese economic thinking to Australian economic policymakers RBA governor Michelle Bullock was also due to visit the country in late May.

Hauser released this chart to illustrate how the US is more dependent on trade with China and cannot replace many imports from China whereas China can more easily replace imports from the USA.

One of Hong Kong’s wealthiest tycoons, Li Ka-Shing, whose Australian interests include energy and agricultural investments, has moved into the carbon market by buying a Western Australian rural property for a “regenerative agriculture” project.

The company has bought a pastoral lease for 350,000 hectares of land – three times the size of Hong Kong - which will be dedicated to regenerative agriculture and carbon sequestration, with a project approved by the Australian Clean Energy Regulator.

CK Group is better known for its infrastructure and financial services businesses and high-profile projects like its recent sale of Panama Canal port interests amid the Trump Administration’s push go reclaim the Canal.  But its Hong Kong-listed CK Life Sciences has several interests in Australia’s agriculture sector, ranging from vineyards, to agribusiness and salt production.

The Australian Financial Review quoted a company spokesperson saying the decision to enter the regenerative agriculture sector was driven by carbon reduction considerations and the prospect of trading in Australian carbon credit units.

Asia Pacific Economic Cooperation (APEC) group economies  are facing a larger downgrade in growth than the rest of the world in a sharp shift from their common status as a higher growth zone.

GDP growth across the 21country region is projected to slow to 2.6–2.7 percent in 2025–2026 according to the APEC Policy Support Unit, down from 3.6 percent last year. And this downturn is lower than the 3.1–3.3 percent forecast in the Unit’s March 2025 APEC analysis, highlighting how rising trade tensions and heightened uncertainty are undermining the recovery.

A report for a trade minister’s meeting this month said the global trade environment was expected to deteriorate in 2025. Merchandise trade volume growth is projected to turn negative, from an expected 3.0 percent expansion to a contraction of -0.2 percent. Services export growth has also been revised down, from 5.1 percent to 4.0 percent.

Within APEC, the volume of goods and services exports is expected to grow by only 1.1 percent in 2025 on average, a sharp reduction from 6.1 percent in 2024.

Ironically for a multilateral group established to pursue free trade, the report warns that trade-facilitating policies by APEC countries are increasingly offset by a surge in restrictive and discriminatory measures.

No country is more important to Australia than Indonesia.
    - Paul Keating, Sydney, (March 16, 1994)

I am here in Indonesia because no relationship is more important to Australia than this one.
    - Anthony Albanese, Jakarta, (May 15, 2025)

The emergence of the New Order government of President Soeharto … was the single most beneficial strategic development to have affected Australia and its region in the past thirty years.
   - Keating, Sydney, (March 25, 1998)

The relationship between Australia and Indonesia is so important. Important for our defence and security, important for our economic future, and important for the region.
   - Albanese

Three months ago, I launched the Australia Today Indonesia 94 program … Today we launch the centrepiece of the program this Trade and Investment Forum which in time may well be seen as a turning point in the relationship between our two countries.
   - Keating, Jakarta (June 29, 1994)

It is no accident that I launched “Invested: Australia’s Southeast Asia Economic Strategy to 2040” here in Jakarta two years ago. This is the fastest growing region of the world in human history and Indonesia is central to that growth.
   - Albanese

The relationship is growing in all directions.  For Australia’s part at least, it’s hard to think of any single bilateral relationship where so much is going on.
   - Keating (Canberra, August 23, 1994)

To convert extraordinary potential into concrete progress, then all of us - government, business, civil society – need to demonstrate greater engagement and ambition … I want us to aim higher, go further and work even more closely together.
   - Albanese

After three acting presidents in six months South Koreans will attempt to resolve their unprecedented leadership impasse at a special presidential election on June 3.

The election follows the impeachment of former conservative president Yoon Suk-yeol in December after his shock declaration of martial law, supposedly due to his frustration over the leftist controlled National Assembly. The country has churned through three acting presidents since raising questions about its status as one of Asia’s most economically and politically stable post-authoritarian states.

The well-established leftwing Democratic Party candidate Lee Jae-myung, a lawyer, former provincial governor and 2022 presidential election loser to Yoon, has led the opinion polls through the leadership crisis.

However, he has lost some ground during campaign debates with the People Power Party (PPP) candidate Kim Moon-soo, a former labour activist and provincial governor turned conservative minister under Yoon.

Yoon left the PPP on May 17 in an attempt to give Kim room to campaign free of the martial law affair during which Kim provided some support to Yoon, but has since apologised.

Briefing MONTHLY is a public update with news and original analysis on Asia and Australia-Asia relations. As Australia debates its future in Asia, and the Australian media footprint in Asia continues to shrink, it is an opportune time to offer Australians at the forefront of Australia’s engagement with Asia a professionally edited, succinct and authoritative curation of the most relevant content on Asia and Australia-Asia relations. Focused on business, geopolitics, education and culture, Briefing MONTHLY is distinctly Australian and internationalist, highlighting trends, deals, visits, stories and events in our region that matter.

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