Briefing MONTHLY #85 | June 2025

As May rolled into June, military and defence heavyweights gathered in Singapore at the Shangri-La Dialogue where a thoughtful keynote speech from French President Emmanuel Macron on Europe and the Indo Pacific was quickly overshadowed by a warning from US Defense Secretary Pete Hegseth that a Chinese invasion of Taiwan could be “imminent”. Hegseth also met one-on-one with his counterparts from Australia, Singapore and the Philippines before flying out.

Asia’s Summit Season comes later in the year, when ASEAN, the East Asia Summit and APEC are busy with sideline meetings that are often more consequential than formal proceedings. Official entourages zip past each other in hotel corridors, hustling their charge along to their next stop in a diplomatic version of speed dating.

But this year the frenzy has been constant with ministerial staff, diplomats, security chiefs and trade negotiators working overtime. A White House that views all through an America-First lens has torn down the old order and the new one is a work in progress. At the G7 in Alberta, Canada in mid-June, with the July 8 deadline for punitive US tariffs looming, everyone wanted a tete-a-tete with Donald Trump. Israel’s Operation Rising Lion saw Trump leave early, cancelling planned meetings with Anthony Albanese and South Korea’s new President Lee Jae-myung. Japanese Prime Minister Shigeru Ishiba had no luck tying down a trade deal. The three countries, along with New Zealand, are NATO’s regional partners. A week later various news reports suggested Trump wanted a catch up at the NATO Summit in The Hague from June 24-25. Albanese thought about it but decided no, Lee waited a bit longer before backing out. Ishiba was going until the day before and then cancelled. Spare a thought for those engaged behind the scenes.

Indonesia’s President Prabowo Subianto was invited to the G7 but instead travelled to St Petersburg. It was Prabowo’s second meeting with Vladimir Putin in Russia in a year. Speculation that Russia and Indonesia were strengthening defence ties caused a furore here in the runup to last month’s election but other bilateral links are uncontroversial. (See NEIGHBOURHOOD WATCH)

In his first major speech since the election, Albanese noted voters approved of a bigger focus on regional matters, a nod to the work Labor has done to rebuild relationships in Asia and the Pacific since coming to power in 2022. Emeritus professor and the author of the 2000 Defence White Paper Hugh White wants a more drastic calibration, arguing Trump is a symptom – not the cause – of a new era where the US will be largely absent from East Asia and the Western Pacific. (See ASIAN NATION).

Finally, a personal note. As long-time editor Greg Earl wrote last month, he’s taking some time away from Briefing MONTHLY. It’s my pleasure to have taken up the baton. Thanks for reading.

Emma Connors
Briefing MONTHLY acting editor

Korean voters are hoping for some stability after a June 3 snap election installed Democratic Party leader Lee Jae-myung (pictured below with First Lady Kim Hye-kyung) in the top job. After a determinedly low-key inauguration on June 4, President Lee – who called the public out on the streets to protest last year’s martial law emergency – pledged to “restore the military’s honour and public trust, tarnished by illegal martial law, and ensure the military is never again used in politics”.

Lee’s election marks a return to South Korea’s more liberal past as voters further punished conservatives. Former President Yoon Suk Yeol faces a criminal trial after his failed attempt to impose martial law. A controversial figure – Lee was stabbed last year by a would-be assailant angry at a lack of progress on corruption charges – Lee has pledged to be a ‘president who ends divisive politics and overcomes crisis through national unity”.

On the other side of the demilitarised zone (DMZ), the nuclear-armed regime of Kim Jong Un is an ever-constant threat on the Korean peninsula, but the most pressing problem for the new President is economic stagnation. He has set out an ambitious agenda including “massive investment in cutting edge industries like AI and semiconductors”. He also intends to build on his nation’s big success in culture exports. This month marks the 12th anniversary of the K-pop sensation BTS whose millions of fans are among the most ardent enthusiasts of the Korean Wave that has washed across the world. Korea’s Ministry of Foreign Affairs reports the K wave, that includes everything from K-dramas to K-beauty and K-food, has added 19.54 trillion won ($22 billion) to the national economy and the new President want to build on that.

These plans require investment and innovation – which will depend on how well his government negotiates with the nation’s powerful chaebols – and export success, now under threat from Trump’s plan to impose a country-specific 25 per cent tariff. South Korea’s Trade Minister Yeo Han-koo was in the US for discussions from June 22 -June 27.

As the massive military build-up in Europe spills over into this region. America’s allies – Australia, Japan, the Philippines, and South Korea – face some tough choices.

The International Institute for Strategic Studies noted “robust and steady growth in Asian defence budgets” in this year’s Military Balance, its annual assessment of global military capability and spending. “This continuity comes as strategic drivers – such as China’s increasing assertiveness and North Korean belligerence – galvanise threat perceptions and well-funded investment programmes, with significant spending increases coming from the region’s larger, more mature economies”.

China's defence spending kicked up by 7.4 per cent in 2024 to $US235 billion. The IISS described this rise as “notable as it surpasses the growth rates of other Asian countries, though Asia's overall share of global military spending decreased slightly due to increased spending in other regions like Europe and the Middle East”.

Now Washington – with its world-dominating $US968 billion military budget – is pushing its allies to do more.

An annual ministerial-level meeting between Japan and the US is in the balance due to Tokyo’s unease with Washington’s demands for its allies to spend more on defence. The Financial Times reported Japan cancelled 2+2 security talks between Secretary of State Marco Rubio and Secretary of Defence Pete Hegseth and Foreign Minister Takeshi Iwaya and Defence Minister Gen Nakatani scheduled for early July. Japan is currently on track to raise its defence budget to 2 per cent of GDP by 2027 (see below). This appears not to be sufficient for Washington.

At the Shangri-La Dialogue, US Defence Secretary Hesgeth said Australia should increase its defence spending to 3.5 percent of its GDP “as soon as possible”. It’s currently at 2.05 per cent, on its way to 2.3 per cent by 2030. The Prime Minister indicated Canberra was not going to do more because Washington wants it to. “We determine our defence policy here,” Albanese said in a press conference a few days after the Hegseth meeting. “We’re a sovereign nation that needs to have pride in our sovereignty and in our capacity to make decisions in our national interest. That is what we will do.” Just when it serves the national interest to please the commander of the world’s largest economy is something governments the world over are grappling with.

ndonesian President Prabowo Subianto was greeted by an honour guard when he arrived in St Petersburg (see below) after knocking back an invitation to attend the G7 in favour of heading to Russia for the city’s International Economic Forum. The annual event fetes those countries – led by China and India – willing to trade with Russia’s war-weakened economy.

At the event, Prabowo said he meant “no disrespect” to the G7 countries but was simply respecting an earlier commitment. “So please do not read too much into the event… Indonesia, by tradition, has always been non-aligned. We respect all countries. Our foreign policy is very simple – one phrase: A thousand friends are too few, one enemy is too many. We want to be friends with everybody.” The Indonesian leader praised Russia and China which had never had “double standards”.

At a joint press conference the following day, the two leaders announced a plan to build a Russian spaceport on Biak Island in Papua, the same site where Russia had reportedly wanted to build a military base. While Indonesia has firmly ruled out any such suggestion, Putin was at pains to emphasise the two countries’ 75 years of diplomatic ties and described Indonesia as one of Russia’s “key partners” in Asia. The Russian leader welcomed Indonesia’s “growing role” in global affairs and said its decision to join the expanded BRICS group (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE) would enhance the bloc’s potential.

The space collaboration is part of Russia’s effort to increase its presence in the region, Radityo Dharmaputra from the Airlangga University in East Java told The Australian’s Dian Septiari. “While it’s true that this is more a civilian co-operation and not military, Russia’s growing presence across all levels, in the government, society, academia and universities, as well as media, is becoming more evident”.  And Prabowo and Putin appear to share a mindset, Radityo believes. “… the narrative of the ‘shared views’ here refers more to the idea that Indonesia and Russia are sovereign, equal nations that cannot be dictated by others, especially Western countries.”

While Prabowo was in Russia, Putin was also conferring by phone with China’s President Xi Jinping on the Middle East. As the world waited to see if the regime led by Ayatollah Ali Khamenei would survive Israel’s full-frontal attack, Russia and China called for de-escalation. Putin, blithely ignoring his invasion of Ukraine, offered to mediate between the two sides. It was an audacious offer, one that would never be taken up. But it gives an insight into Putin’s view of Russia’s rightful position in a multipolar world.

We have long known of China’s strategic intent to dominate in Asia. Perhaps, given Putin’s aggressive positioning of the expanded BRICS, we should give more thought to Russia’s plans to use its links in this region to further its ambitions. Indonesia’s fierce embrace of non-alignment will not allow for any military base but that does not preclude – as Jakarta’s links with Canberra clearly demonstrate – close ties.

Japan has outlined plans for a ¥100 billion ($1.06 billion) to lure top research talent from overseas institutions, including American universities. Countries the world over have long sought to copy the American innovation model, exemplified in Silicon Valley and Boston – home to both Harvard and MIT. In these hubs, ideas and venture funding feed off each other in a cycle of serial entrepreneurship that creates high value jobs and generates wealth via world-leading industries.

Efforts to replicate this pattern have often floundered. Those that have succeeded have done so by feeding into and out of the American system. The best and brightest, such as the Indian-born Microsoft CEO Satya Nadella, have continued to flock to the US for post-graduate study and subsequent careers.

Or at least they did.

The hostile attitude from the White House toward Harvard, cuts in government workforce, slashing of research budgets, and hostility to migration has led to nation-wide fear, uncertainty and doubt. Many leading universities in the US have paused post graduate admissions and stopped all new hires as they try to ride out the storm. Before China and the US trade negotiators in London came up with a deal to unfreeze Chinese imports of rare earths, the US State Department said it would “aggressively” revoke visas for Chinese students and change criteria for future study applications from China and Hong Kong. On June 18, the Department said it has resumed student visa processing with enhanced screening. A federal judge court has also rejected the attempt to ban Harvard from accepting any foreign students. Trump has said a deal with the university is in the works but with the future unclear, many are looking for alternatives.

Japan is hastening to provide just that. Minoru Kiuchi, Japan's Minister in charge of Economic Security, said: "We will make utmost efforts to make our country the most attractive in the world for researchers."

Others are also laying out the welcome mat. Across China, cities and provinces are offering money, housing, healthcare as well as generous salaries to entice researchers. One example cited in Nature is the Hunan province that is offering up to 1 million yuan ($216,000) to entice doctoral students to move from abroad.

In a National Press Club speech on June 10, Albanese said Australians had voted for a government that would “face global challenges, shape economic change and engage with our region in the Australian way”, one that would “strengthen our defence capability and strengthen our relationships in our region”. His government’s ambition for the country, the PM said, is one “where our international relationships in the fastest growing region of the world in human history benefit us, but also provide a platform for us to play a positive and stabilising global role …”

Exactly how Australia should do that remains a source of fierce debate. Various commentators have spoken out in favour of increased defence spending following Defence Secretary Hegseth’s meeting with Defence Minister Richard Marles in Singapore. Writing in The Australian, Ross Babbage described Albanese’s assumption that Australia would not need to fight a war in the Indo Pacific in the coming decade as a “risky bet”. The chief of the Defence Force Chief Admiral David Johnston told an ASPI event the “comfortable security blanket” of a 10-year “strategic warning time” was gone. “We’re having to reconsider Australia as homeland from which we will conduct combat operations,” Admiral Johnston said.

Hugh White provided a more radical advocacy in a Quarterly Essay. His view is Australia’s politicians – including Albanese – have failed to communicate the hard truths about changing geopolitics. White argues it’s “almost inevitable the US-led global order will pass, and that has nothing to do with Trump”. Rather, it’s a cost-benefit analysis. The global policeman role no longer provides sufficient returns for Washington.

In White’s analysis, while the White House has its teeth bared at China on trade, Trump does not view China as a strategic rival. The US President accepts there will be spheres of influence where the US – protected by its “big beautiful oceans” – is not top dog. This is the reality of a multipolar world, White concludes, arguing it is past time for Canberra to move on from looking at our neighbourhood as “a zero-sum contest” between US and China for regional primacy. As to China, “Once we abandon the illusion that America is going to manage China for us, we will realise we have to find our own way with it”.

For some, White acknowledges, accepting China’s rise involves compromising on principles and values. But not doing so carries the risk of a major war. “Balancing these conflicting and moral imperatives is one of the great questions of our time,” he observes.

A memoir released this month by Chinese-Australian journalist Cheng Lei demonstrates these are not just abstract concepts. Her chilling account of incarceration by China’s Ministry for State Security deserves to be widely read. After moving to Australia with her family as a child, the adult Lei excitedly returned to China to pursue her dream of becoming a journalist. In doing so, she trod the path familiar to many migrants and their children keen to forge links with their birth country. These stories are part of Australia’s multicultural payoff, evidence of the “people-to-people” links that are generally positive for those involved. In Lei’s case though, it led to more than three years separation from her children after she was detained in the Orwellian-named “residential surveillance” on trumped up espionage charges.

For more,  listen to ABC Conversations with Hugh White and Cheng Lei.

While the key ministers charged with representing Australia on the world stage are unchanged in the new Labor government – Foreign Minister Penny Wong, Defence Minister Richard Marles, Trade Minister Don Farrell – Albanese announced one new appointment in his Press Club speech.

Helping to shape domestic and international policy will be Dr Steven Kennedy newly installed as Secretary of the Department of Prime Minister and Cabinet. The Australian Financial Review’s economic editor John Kehoe suggested Albanese was keen to install a “pragmatic policy maker” following the resignation of Glyn Davis and Dr Kennedy, previously Treasury Secretary, fits the bill. His new role as the nation’s lead public servant and chief adviser of the PM will draw on his experience across international relations and national security as well as social and economic policy.

In Dr Kennedy’s post-budget briefing to business economists, delivered at the end of last month, he joined the dots between the uncertainty created by Trump’s tariff threats and global economic growth. He noted that outside of the Covid years, China has contributed more to world growth than the G7 since 2006 and more than the US since 2001. Downgrades to China’s growth will therefore hurt global growth more than a US slowdown.

The latest data shows China’s export growth has slowed while exports to the US plummeted, down 34.5 per cent in May compared to the same month last year. Australian exports to China also fell in the first quarter of 2025, down 14 per cent. The World Bank revised down its growth forecasts in its latest update (see DATAWATCH).

An annual survey by the China-Australia Chamber of Commerce concluded that Chinese and foreign firms “active across the China-Australia business corridor” are still buying into the China growth story. They are also hedging their bets. Some six in ten foreign companies surveyed are diversifying or considering doing so.

In his speech, Dr Kennedy emphasised the need to adjust to the current changed circumstances, where a social media post can shift global sentiment.

“Economic forecasters like to add a rider to their forecasts, that there is more than the usual degree of uncertainty surrounding the outlook. It may be time to stop saying that and accept that for the foreseeable future the world will be characterised by a persistent high level of uncertainty, a level not experienced for decades,” Dr Kennedy said.

A population update from the Australian Bureau of Statistics once again demonstrated the importance of migration from Asia – and hinted at the impact of measures to reduce international student numbers. Australia’s population grew by 1.7 per cent last year, with 27.4 million people calling this continent home, 445,900 more than at the end of 2023. The natural increase – births minus deaths – added 105,200 while overseas arrivals minus departures brought a net increase of 340,800 people. That was 189,900 less than the previous year, suggesting the government’s “quasi caps” on foreign enrolments in tertiary education are reducing arrivals.

Previously released ABS data shows that in 2023-24, the top five countries of birth for migrant arrivals were India, China, the Philippines, Australia and the United Kingdom. Government data shows fewer Indian students are applying for visas to study in Australia. Chinese interest is also lower, though policy changes have had less of an impact on that market.

Changi Airport Group has awarded a S$999 million ($1.18 billion) tunnelling contract after breaking ground on its T5 new terminal a month ago. The winning bid for the tunnel network that will transfer passengers, baggage and services around one of the world’s busiest airports belongs to a joint venture between Penta-Ocean Construction and Koh Brothers Building and Civil Engineering. Both firms have form in delivering big projects. Penta-Ocean has been involved in land reclamation, while Koh Brothers designed the Marina Barrage, creating a massive reservoir that helps supply the country’s drinking water.

Even after decades of land reclamation, Singapore is just a tad over 735 square kilometres in total but the city-state has always gone big on infrastructure and the airport’s latest expansion plans are no exception. T5 is part of the Changi East development that includes a third runway and is designed to handle 50 million people each year when it opens in the mid-2030s. While construction plans were delayed by the pandemic, those familiar with Singapore’s planning prowess will not be surprised work is back on track to extend two branches of the country’s MRT system to the T5 metro station.

Jakarta says it’s hopeful it will soon conclude a free trade deal with EU. But what about palm oil? In April, the EU confirmed it would comply with a January ruling by the WTO that found its restrictions on palm oil imports went against trade rules.

The EU had limited imports of the crop that’s used in processed foods, soap, shampoo and as a biofuel on environment grounds. The EU’s position was that palm oil contributed to greenhouse emissions and was bad for biodiversity. Limiting its use in biofuels also advantaged alternate plant oils produced by EU member countries.

Earlier this year, a WTO panel determined the cap on palm oil was a restriction on trade. It found the EU’s pursuit of environmental goals must be done in such a way that treats trading partners fairly and provides equal opportunities. Neither the EU or Indonesia appealed the finding. In an analysis published by the University of Melbourne, Fia Hamid-Walker concluded the WTO ruling shows that environmental goals must be “developed with, rather than imposed upon” the Global South.

When the Australia-India Economic Cooperation and Trade Agreement was signed more than three years ago, both sides saw it is as a precursor to a more comprehensive trade deal. Those negotiations drag on.

This month the venue was an OECD meeting in Paris and once again, there was plenty of enthusiasm but little progress reported. Trade Minister Don Farrell told the ABC he had a “very good meeting with my good friend, Trade Minister Goyal from India. He's keen for a fresh trade agreement. We can do more with India.” It’s looking increasingly likely the European Union, India’s largest trading partner, will beat us to it though. Indian media, citing government sources, say both sides are keen to finalise an FTA this year and are aiming for an “early harvest deal” as soon as July.

… the world is incredibly fortunate to have an American president with the combination of being a peace seeker and a strong leader. President Trump has the unique ability to make possible things that seem impossible, moving the Overton window. He is the ultimate deal maker. 
    - US Secretary of Defense Pete Hegseth, Singapore (May 31, 2025)

It is not very useful in defence diplomacy to exchange notes via social media. We are all mature adults … if we want to get something substantive done, my suggestion is social media may not be the most appropriate channel for such involved and intense discussion.
   - Singapore Defence Minister Chan Chun Sing, Singapore (June 1, 2025)

Russia and China have always defended the downtrodden… the oppressed, (they) have always fought for the justice of all peoples of the world.
    - Indonesian President Prabowo Subianto, St Petersburg, Russia, June 18

The World Bank has cut its growth forecasts for most countries. On the good news front, a global recession is not expected. However, unless conditions improve, economic expansion in the first seven years of this decade will be the slowest since the 1960s.

The latest Global Economic Prospects report makes for a sobering read. “Outside of Asia, the developing world is becoming a development-free zone," said World Bank chief economist Indermit Gill.

While Asia is still on the march, big, influential economies have trimmed their sails.

In China, growth is projected to slow to 4.5 per cent this year. It could be worse, with trade tensions partly offset by policy support measures. In India, growth for the year ending March is estimated at 6.5 per cent and the World Bank has trimmed back its forecast for the next 12 months to 6.3 per cent. Exports have dropped, hampered by weaker activity in key trade partners and rising global trade barriers.

Taiwan’s ruling party could soon be on track to regain control of parliament after the Central Election Commission gave the green light for 24 recall votes to be held on July 26 – all in seats held by members of the main opposition party, the Kuomintang (KMT). If voters support the recall motions, there will be by-elections later this year. Legislators who have been recalled are not allowed to stand in by-elections.

Taiwan’s political system allows for recall votes if petitions requesting the same obtain the requisite number of signatures in a constituency – one in ten has to approve the motion. However, a campaign on this scale is unprecedented and could change the balance of power without a national vote.

While the Democratic Progressive Party’s (DPP’s) Lai Ching-te occupies the Presidential Office, his party lost its majority in elections last year. The KMT then joined forces with the Taiwan’s People Party and this year the opposition parties have managed to pass various bills, including budget cuts. The DPP, labelling this obstructionist, supports the recall campaign orchestrated by civil society groups who claim the KMT and TPP are “undermining constitutional order” and distracting lawmakers who should be concentrating on shoring up Taiwan’s military defences against China. The DPP has called on the Taiwanese people to vote “yes”, and “oppose the communists”, a reference to what it regards as the KMT’s accommodating attitude toward China. For its part, the KMT has called on voters to “fight against dictatorship and vote no”.

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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