Welcome to This Week’s Asia on the Horizon

Xi Jinping Signals Support for China’s Tech Sector Amid Economic and Geopolitical Pressures

Chinese President Xi Jinping’s recent meeting with top business leaders, including Alibaba’s Jack Ma, Tencent’s Pony Ma, and Huawei’s Ren Zhengfei, signals a renewed effort to bolster China’s private sector, particularly in technology and innovation. The high-profile symposium, attended by Premier Li Qiang and other senior officials, aimed to reassure private enterprises of state support amidst economic slowdown and rising U.S.-China trade tensions. Xi emphasized the need to “remove obstacles to fair market participation” and encouraged business leaders to drive technological advancements and expand both domestically and internationally. His speech highlighted a shift from Beijing’s previous regulatory crackdowns, which had severely impacted major tech firms, towards a more cooperative stance to stimulate investment, artificial intelligence development, and semiconductor self-sufficiency. The Hang Seng Tech Index responded positively, rising 24% since the start of the year, driven in part by enthusiasm surrounding AI startup DeepSeek, which has demonstrated China’s growing competitiveness in advanced technologies.

However, analysts remain cautious about the long-term implications of Xi’s assurances, as China’s regulatory environment remains unpredictable. The meeting’s outcome could significantly impact China’s broader economic trajectory, as continued restrictions on foreign investment and geopolitical pressures, including new tariffs imposed by the Trump administration, may hinder growth. Beijing’s simultaneous push for economic self-reliance and its messaging to private firms suggest an attempt to balance state control with market-driven innovation. If China can successfully foster a more stable business environment while countering U.S. containment strategies, this renewed alignment with the private sector could serve as a critical pillar in China’s broader strategy to navigate economic uncertainty and sustain technological leadership in the Indo-Pacific region.

Taiwan-Matsu Undersea Cable Suffers Another Disruption Amid Cybersecurity Concerns

Taiwan’s Ministry of Digital Affairs (MODA) announced that a submarine cable linking Taiwan and the Matsu Islands suffered a “complete disconnection” on Sunday, marking the second outage of the year. Chunghwa Telecom, the operator of the cable, reported the issue to the National Communications Commission and sought assistance from the Coast Guard Administration to investigate the cause. To mitigate the impact, Chunghwa Telecom activated backup microwave systems to maintain connectivity between Taiwan and the Matsu region. The disruption follows a similar incident on Jan. 22, which MODA attributed to “natural deterioration,” while another cable, the Taiwan-Matsu No. 3 link, has been under repair since mid-January. The recent incidents highlight the vulnerabilities in Taiwan’s critical infrastructure, especially given Matsu’s proximity to China and the ongoing geopolitical tensions in the region.

The timing of these disruptions raises concerns about cybersecurity and potential external interference, particularly as Taiwan’s cyber resilience has been a growing focus for the government. Former digital affairs minister and Taiwan’s ambassador-at-large for cyber affairs, Audrey Tang, reassured that despite the damage, internet connectivity remained intact due to robust contingency measures. Tang, who recently spoke at the Munich Cyber Security Conference, emphasized Taiwan’s proactive digital defense strategies amid increasing cyber and infrastructure threats. Meanwhile, Chunghwa Telecom stated that a new undersea cable is under construction, set for completion in 2026, to bolster connectivity. However, with Taiwan playing a crucial role in global telecommunications and semiconductor supply chains, repeated disruptions to its digital infrastructure could signal broader risks, underscoring the strategic importance of protecting undersea cable networks in the Indo-Pacific region.

U.S. Reaffirms Support for the Philippines Amid Rising Tensions in the South China Sea

The United States has condemned recent aggressive maneuvers by the Chinese People’s Liberation Army-Navy (PLAN) that endangered a Philippine aircraft conducting a routine maritime domain awareness flight near Scarborough Shoal. On February 18, a Chinese Harbin Z-9 helicopter flew dangerously close—within three meters—of a Philippine Bureau of Fisheries and Aquatic Resources (BFAR) aircraft, escalating tensions in the disputed waters. The U.S. government reaffirmed its commitment to the 1951 U.S.-Philippines Mutual Defense Treaty, which extends protection to Philippine public vessels and aircraft in the South China Sea. The incident follows a similar act of intimidation on February 11, when a Chinese military aircraft engaged in a close encounter with an Australian surveillance plane. The U.S. has called on Beijing to cease its coercive actions and respect international law, emphasizing its continued support for Manila in defending its maritime rights.

The Philippines has responded forcefully, with the National Maritime Council (NMC) condemning China’s actions as “unprofessional and reckless.” The Philippine government has announced plans to lodge a formal diplomatic protest, citing the incident as a violation of international aviation norms and the 2016 South China Sea Arbitral Tribunal ruling, which invalidated China’s expansive territorial claims. Meanwhile, Beijing has dismissed Manila’s allegations, asserting that the Philippine aircraft had trespassed into Chinese airspace. This latest confrontation underscores the intensifying maritime disputes in the Indo-Pacific, with China’s assertiveness increasingly met by coordinated pushback from regional allies. Despite Beijing’s continued military maneuvers, the Philippines has vowed to persist with its maritime operations, asserting its sovereignty over Scarborough Shoal in accordance with international law and national legislation.

Japanese Businesses Express Deep Concerns Over Trump’s Trade Policies

A recent Reuters survey revealed that nearly 90% of Japanese companies view U.S. President Donald Trump’s policies as detrimental to their business, highlighting growing concerns over trade tensions and protectionist measures. Among the key worries, 72% of respondents cited Trump’s trade strategies—especially his emphasis on tariffs—as the most harmful factor, while 26% pointed to escalating U.S.-China friction. The anxiety has intensified since December when 73% of Japanese firms anticipated negative effects from Trump’s second term. The U.S. has already implemented 25% tariffs on steel and aluminum and imposed 10% duties on Chinese goods, with additional auto tariffs of up to 25% potentially coming into effect in April. As Japan heavily relies on both the U.S. and China for trade and investment, Trump’s policies are seen as a major risk to supply chains, particularly in sectors like automotive and semiconductors, which could face ripple effects from global tariff hikes.

Despite the prevailing concerns, some Japanese businesses see positives in Trump’s policies. About 37% of companies that viewed his administration favorably cited deregulation and tax cuts as beneficial, while another 37% highlighted the boost to fossil fuel production. However, only 16% of firms reported adopting a more cautious stance on U.S. operations, with 80% maintaining their business plans. Trump has also pressured Japan to increase investments in U.S. energy and technology, further complicating economic relations. Additionally, the survey captured mixed reactions to Japan’s recent interest rate hike, with 61% viewing it as appropriate while 44% warned that further hikes could hurt capital spending. As Trump continues to push for more aggressive trade measures, Japanese businesses remain on edge, uncertain about the future trajectory of U.S.-Japan economic relations.

U.S. Revises China Policy Language, Emphasizing Trade and Strategic Competition

The U.S. State Department has updated its official China webpage, reflecting a shift in policy priorities under the Trump administration. The revised language underscores a more confrontational stance on economic and strategic issues, with an expanded focus on the U.S.-China trade deficit, unfair trade practices, and national security concerns related to Chinese cyber activities. Notably, the update removes references to previous collaboration with China on environmental, cultural, and human rights issues, aligning with the administration’s broader efforts to restructure U.S. foreign assistance. The fact sheet also omits prior mentions of working with allies to counter China, instead emphasizing “reciprocity and fairness” in bilateral relations. Furthermore, the update accuses the Chinese Communist Party (CCP) of seeking to manipulate international organizations, reinforcing Washington’s perception of Beijing as a systemic challenge to the rules-based international order.

The changes have drawn sharp criticism from China, with the foreign ministry denouncing the revisions as “distorting facts” and hyping up strategic competition. A particularly notable shift is the replacement of “People’s Republic of China (PRC)” with “China,” a move that some analysts interpret as a subtle concession to Beijing’s legitimacy as the default political system governing China. At the same time, the removal of references to U.S. assistance programs and the renewed focus on economic competition signal a hardening of Washington’s trade and investment policies. The updated language follows recent escalations, including Trump’s imposition of 10% tariffs on all Chinese imports and plans for further economic countermeasures. This policy realignment suggests that the U.S. will continue prioritizing economic decoupling and industrial self-sufficiency while adopting a more unilateral approach to managing its relationship with China.

ASEAN Plans Summit with U.S. to Address Tariff Concerns

The Association of Southeast Asian Nations (ASEAN) is planning a special summit with the United States to discuss the economic implications of President Donald Trump’s proposed tariffs on automotive, semiconductor, and pharmaceutical imports. Malaysia’s Foreign Minister Mohamad Hasan, whose country currently holds the ASEAN chairmanship, emphasized the urgency of the matter, particularly for Malaysia, where electrical and electronics exports constitute 60% of total trade with the U.S. The proposed 25% tariffs could significantly impact ASEAN economies that rely on trade with the U.S., particularly in key industries such as semiconductors, where the region plays a crucial role in global supply chains. Hasan underscored that ASEAN members need to coordinate their response and present a unified position to prevent excessive economic burdens on their industries.

The proposed U.S. tariffs have raised concerns across Southeast Asia, given the region’s deep integration into global manufacturing networks. The U.S. remains a major trading partner for ASEAN, with Malaysia alone accounting for $80.2 billion in bilateral trade in 2024 and a trade surplus of $24.8 billion. ASEAN’s effort to hold direct talks with Washington reflects its strategic need to maintain stable trade relations while mitigating the risks of increased protectionism under the Trump administration. The outcome of the summit could shape the future of U.S.-ASEAN economic ties, with potential negotiations on tariff exemptions or adjustments to safeguard the competitiveness of Southeast Asian exporters in high-tech industries.

Russia and China Strengthen Diplomatic Ties Amid Global Tensions

On the sidelines of the G20 Ministerial Council in Johannesburg, Russian Foreign Minister Sergey Lavrov and his Chinese counterpart Wang Yi reaffirmed their commitment to deepening bilateral relations and strategic coordination. Lavrov highlighted the regularity of high-level engagements between Moscow and Beijing, emphasizing that such frequent meetings are necessary given the evolving global landscape. He acknowledged the growing alignment between Russia and China on major international issues and stressed that their cooperation serves as a stabilizing factor in an increasingly polarized world. The two ministers discussed preparations for Wang Yi’s upcoming visit to Moscow, which is expected to further cement their diplomatic and strategic collaboration. Lavrov also extended congratulations on the Lunar New Year, metaphorically likening the wisdom and flexibility of the Year of the Snake to the qualities needed in foreign policy amid global uncertainties.

The meeting underscored Russia and China’s shared commitment to advancing a multipolar world order and countering Western influence in global governance structures. Both countries pledged continued coordination in key international forums, including the United Nations Security Council, BRICS, the Shanghai Cooperation Organization (SCO), ASEAN, and the G20. Lavrov emphasized that Moscow and Beijing would work together to challenge what they perceive as Western unilateralism and promote a fairer, rules-based international system. The strengthening of Russia-China ties comes at a critical time, as both nations face growing pressure from the United States and its allies. Their deepening partnership reflects a strategic effort to consolidate influence in multilateral organizations and shape global governance in line with their interests.

Japan Reaffirms Support for Ukraine Amid G20 Talks

At the G20 Foreign Ministers’ meeting in Johannesburg, Japanese Foreign Minister Takeshi Iwaya reaffirmed Japan’s unwavering support for Ukraine, despite shifting global dynamics and tensions within the U.S. administration under President Donald Trump. Speaking on Thursday, Iwaya welcomed ongoing diplomatic efforts aimed at securing peace but underscored the necessity of maintaining pressure on Russia. His remarks came amid concerns that Trump’s administration is exploring negotiations with Moscow, which could potentially alter the balance of international support for Kyiv. Japan’s commitment to Ukraine reflects its broader strategic priority of upholding international law and deterring aggression, particularly as Tokyo remains wary of geopolitical challenges in the Indo-Pacific region, including China’s assertiveness.

Iwaya emphasized that Russia’s invasion represents a serious violation of the rules-based international order, a stance that aligns with Japan’s broader foreign policy objectives. While Japan has traditionally coordinated its Ukraine policy with the G7, Trump’s evolving stance has introduced new uncertainties. Tokyo remains cautious about any potential shifts in U.S. policy that could weaken international resolve against Moscow. As the conflict nears its third year, Japan’s role in providing diplomatic and economic support to Ukraine is expected to continue, reinforcing its position as a key player in global security discussions. The G20 discussions highlighted growing concerns about international divisions over Ukraine, but Japan’s message remained clear: any resolution must uphold the principles of sovereignty and territorial integrity.

Russia and India Strengthen Strategic Ties Amid Global Uncertainty

On the sidelines of the G20 Foreign Ministers’ Meeting in Johannesburg, Russian Foreign Minister Sergey Lavrov met with Indian Minister of External Affairs Subrahmanyam Jaishankar to reaffirm the strength of Moscow-New Delhi relations. Both ministers highlighted the robust dialogue between their countries and the continued progress in economic and security cooperation, building on agreements reached between Russian President Vladimir Putin and Indian Prime Minister Narendra Modi in 2024. The discussion also focused on the roadmap for upcoming diplomatic engagements, particularly the anticipated Russian-Indian summit later this year. In preparation for this high-level meeting, both sides agreed to intensify ministerial consultations, underscoring the depth of their strategic partnership.

The meeting also covered regional security concerns, with Lavrov and Jaishankar exchanging views on the evolving geopolitical landscape in the Asia-Pacific and Eurasia. They aligned their positions on key multilateral platforms such as the Shanghai Cooperation Organisation (SCO) and BRICS, signaling a coordinated approach to global governance. The Ukraine conflict was also discussed, with Lavrov briefing Jaishankar on Russia’s recent diplomatic interactions with U.S. representatives in Riyadh. While India has maintained a neutral stance on the Ukraine crisis, it continues to emphasize dialogue and peaceful resolution, reinforcing its role as a key intermediary in global diplomacy. The meeting highlighted the enduring strategic cooperation between Russia and India amid shifting global dynamics, particularly as both countries navigate Western sanctions and seek to assert their influence in a multipolar world.

Chinese Naval Drills Near Australia Raise Regional Tensions

The presence of a Chinese naval flotilla, including the advanced Type 055 destroyer Zunyi, off Australia’s east coast has triggered diplomatic concerns, particularly after an unannounced live-fire exercise in international waters disrupted commercial air traffic over the Tasman Sea. Australian officials were caught off guard when airlines received direct warnings from the Chinese navy to reroute flights, highlighting the PLA Navy’s expanding operational reach far from its traditional areas of activity. While the Chinese Ministry of Foreign Affairs defended the drills as routine and in accordance with international law, the lack of prior notification and the proximity of the warships to Australia’s exclusive economic zone were seen as an escalation. Defense Minister Richard Marles called the maneuvers “unusual” but emphasized that Australia was closely monitoring Chinese movements with both naval assets and P-8A Poseidon surveillance aircraft.

The incident comes amid growing Chinese naval assertiveness in the Indo-Pacific, with Australia increasingly aligning itself with the United States and the United Kingdom through the AUKUS defense pact to counter Beijing’s influence. The exercise has sparked criticism within Australia, with Prime Minister Anthony Albanese facing pressure to adopt a firmer stance. The episode underscores Beijing’s increasing willingness to flex its military muscle beyond the South China Sea and into the wider Pacific, signaling its ability to project naval power globally. With tensions already high following recent Chinese military confrontations with Australian and Philippine aircraft, this latest maneuver raises concerns about further maritime confrontations and underscores the importance of regional defense cooperation in deterring potential miscalculations.

French Carrier Strike Group Conducts First-Ever Stopover in the Philippines

In a significant development for maritime security cooperation in the Indo-Pacific, the French Navy’s Charles de Gaulle Carrier Strike Group (CSG) made its first-ever port visit to the Philippines on February 21, 2025. As part of its Clemenceau 25 mission, the CSG docked at Subic Bay and Manila, marking a milestone in France-Philippines defense collaboration. The visit aligns with the Letter of Intent signed between the two nations in December 2023, which aims to strengthen military cooperation, particularly in maritime security. Ahead of the port call, Philippine Air Force aircraft engaged in air exercises with the carrier’s Rafale fighters, and a French destroyer conducted joint drills with the Philippine Navy’s BRP José Rizal and BRP Gregorio Del Pilar. French Ambassador to the Philippines Marie Fontanel and senior military officials boarded the Charles de Gaulle at sea, reinforcing diplomatic and security ties between the two countries.

The visit follows France’s increasing military presence in the region, underscored by its participation in the 2024 Balikatan exercises alongside Philippine and U.S. forces. It comes amid heightened geopolitical tensions in the Indo-Pacific, particularly in the South China Sea, where the Philippines faces repeated confrontations with China over territorial disputes. The French CSG’s deployment highlights Paris’ commitment to regional security and multilateral defense engagement, demonstrated through its participation in Pacific Steller 2025, a large-scale trilateral exercise with the U.S. and Japan in the Philippine Sea. France’s expanding naval footprint, including previous deployments of its warships to Philippine ports, signals its strategic interest in maintaining a rules-based international order in the Indo-Pacific. With additional joint exercises and future engagements planned, this visit solidifies the growing defense relationship between France and the Philippines at a time of increasing maritime security challenges.

China Secures Maritime Presence in Cook Islands Amid Rising Indo-Pacific Tensions

China has expanded its strategic footprint in the Pacific through a newly signed Memorandum of Understanding (MoU) with the Cook Islands, which outlines extensive cooperation in the blue economy, including investments in port infrastructure, shipbuilding, ocean transportation, and deep-sea fishing. The agreement, signed on February 14 in Harbin, China, has sparked security concerns in the region, particularly from New Zealand and Australia, given its potential to provide China with maritime resupply capabilities that could support its naval operations in the Pacific. This development coincides with heightened military tensions, as Chinese warships recently conducted live-fire drills in international waters between Australia and New Zealand, prompting commercial flight diversions. Security analysts suggest that China’s growing presence in the Cook Islands could facilitate increased surveillance and logistical support for its fleet, reinforcing its ability to project power in the region.

The MoU’s announcement has drawn criticism, particularly from New Zealand, which was reportedly not consulted despite its constitutional ties to the Cook Islands. The agreement aligns with China’s broader Indo-Pacific strategy and its efforts to integrate the Pacific into its Belt and Road Initiative while deepening maritime economic ties. The Cook Islands government has emphasized the deal’s economic benefits, including sustainable marine resource management and clean energy projects, but regional security experts warn that the infrastructure investments could serve dual-use purposes, potentially allowing China to expand its coast guard and naval operations under the guise of commercial activity. As tensions in the Indo-Pacific continue to escalate, this latest agreement marks another step in China’s efforts to solidify its presence in a region where strategic competition between major powers is intensifying.