Friday Asia Update: Five Stories From the Week of January 29, 2016

Rachel Brown, Lincoln Davidson, Gabriel Walker, and James West look at five stories from Asia this week.

1. Malaysian prime minister evades corruption charges. Malaysia’s attorney general announced Tuesday that Prime Minister Najib Razak did not commit a crime in accepting a $680 million donation from the Saudi royal family in 2013. Najib has been under investigation for corruption since July, when investigative journalists unearthed documents alleging the prime minister had taken $680 million from a state development fund he had created. The attorney general, who was appointed by the prime minister when his predecessor was fired weeks after the scandal broke, said that Najib returned $620 million of the donated funds. It is not clear how the $60 million that was not returned was used. Najib applauded the end of the investigation, which he called an “unnecessary distraction,” but Malaysian corruption authorities have called for a review of the attorney general’s decision. Even if ultimately cleared of the charges, Najib’s public image may be irrevocably tarnished by the allegations, as well as his government’s attempts to increase Internet censorship and arrest opposition critics.

2. Taliban attacks power grid as China urges peace talks. On Tuesday, after Afghan security forces launched an expanded operation in northern Baghlan province, the Taliban sabotaged a major power line in an attack that destroyed one electricity transmission tower and damaged two others, briefly cutting off a portion of electricity supplied from Uzbekistan to Kabul. Afghanistan imports nearly three-quarters of its electricity, with the majority of power to Kabul coming from Uzbekistan; the national power company was able to provide seventy-five megawatts of backup electricity as security forces worked to de-mine the area so the towers could be repaired. Also on Tuesday, the Chinese Ministry of Foreign Affairs released a statement urging both governments in Afghanistan and Pakistan to restart peace talks with the Taliban, affirming their commitment to facilitating talks that were derailed last summer. China has joined Afghanistan, Pakistan, and the United States in attempting to formalize a process through which the Afghan government can enter negotiations with the Taliban; the newly formed Quadrilateral Coordination Group will meet for a third time in early February in Islamabad. Finally, on Wednesday the Pentagon nominated Army Lt. Gen. John Nicholson to replace Gen. John Campbell as the top U.S. and allied commander in Afghanistan. At a Senate Armed Services Committee hearing, Gen. Nicholson urged caution against withdrawing troops too soon amid the deteriorating security situation across the country.

3. China indicts Canadian charged with espionage. Kevin Garratt, a Canadian citizen who formerly operated a coffee shop in the Sino-Korean border city of Dandong, Liaoning province, has been indicted on charges of spying and stealing state secrets after a year and a half in prison. Garratt and his wife, Julia Garratt, were first detained in August 2014 and were barred access to lawyers for months. While Julia Garratt was released in February 2015, authorities have prohibited her from leaving China. Another foreigner, Swedish human rights activist Peter Dahlin, was expelled from China this week after making a confession on state television that he had “caused harm to the Chinese government [and] hurt the feelings of the Chinese people.”

4. Japanese minister resigns after bribery accusation. Akira Amari, a top economics minister in the Shinzo Abe administration, stepped down after a Japanese magazine alleged that he and his staff had accepted bribes of at least $100,000 from a construction company. Although Mr. Amari denied pocketing the money, and claimed it was a legitimate political donation, he still resigned in order to take responsibility for his staff and to avoid a politically destabilizing scandal. Mr. Amari was in charge of carrying out Prime Minister Abe’s domestic economic revitalization plan and was also Japan’s lead negotiator on the Trans-Pacific Partnership, so there is some question over who will defend the legislation in parliament, since it has not been approved yet, now that he is gone. In addition to Mr. Amari, three other ministers have previously resigned from the Abe administration because of political funding scandals. A former environment minister, Nobuteru Ishihara, has already been chosen to fill Mr. Amari’s empty post, and Mr. Amari plans to continue serving as a member in the lower house of parliament.

5. China deepens footprint in Iran. Chinese President Xi Jinping, as part of a tour of the Middle East last week, was the first foreign leader to visit Iran after sanctions were lifted. While the region remained tense following the rupture in diplomatic relations between Iran and Saudi Araba, the focus of Xi’s trip was largely economic. Xi and Iranian leaders committed to deepening economic cooperation over the next twenty-five years, aiming to expand the value of their countries’ trade to $600 billion. China has been Iran’s largest trading partner over the past six years, and the two nations did over $50 billion in trade in 2014. China’s economic clout in Iran grew significantly while Western sanctions were in place, and China plays a role in a number of major construction projects including Tehran’s metro system and the Niyash Tunnel. The two nations also agreed to a military and security strategic partnership, which includes more collaboration to address terrorism and the expansion of military exchanges. Additionally, China backs Iran’s application to join the Shanghai Cooperation Organization as a full member. Xi also visited Iran’s regional rival, Saudi Arabia, and the Chinese government emphasizes a balanced foreign policy in the region. China has recently become more actively engaged in the Middle East as demonstrated by a new Arab Policy Paper published in mid-January. The state-run media service Xinhua has emphasized the contributions that China could make to the Middle East, including that “the wisdom of China, which is trusted by Middle Eastern countries as a non-interfering country, could serve as an effective remedy for problems and herald a brighter future for the region.”

Bonus: People’s Daily declares war on George Soros’s purported war declaration. The Chinese Communist Party’s (CCP) top newspaper took major offense at remarks about the Chinese economy the investor made at the World Economic Forum last week. Soros said that a hard landing was “practically unavoidable” for the Chinese economy; state media fired back that Soros “would inevitably pay a heavy price” for shorting China. On January 26, an article featured on the front page of the international edition of People’s Daily, titled “Declaring war on Chinese currency? Haha,” said that Soros had “openly ‘declared war’ on China” at Davos, but “there can be no doubt that his challenge to the RMB and HKD will fail.” The daily doth protest too much, methinks.