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VP Kamala Harris talks South China Sea in Vietnam amid U.S.-China rivalry

U.S. Vice President Kamala Harris arrived in Hanoi, Vietnam on August 24, 2021. Harris is on an official trip to Southeast Asia to gather regional allies while the US’s global leadership status is being marred by the aftermath of the aftermath in Afghanistan.

Evelyn Hockstein | AFP | Getty Images

Strategic competition between the US and China came to the fore when Vice President Kamala Harris opened the second leg of her official visit to Southeast Asia in Vietnam.

Harris told Vietnamese officials in the capital Hanoi on Wednesday that it was necessary to pressure Beijing to take action in the South China Sea. Vietnam is a vocal opponent of China’s enormous territorial claims in the strategic waterway.

“We need to find ways to put pressure and increase pressure on Beijing to comply with the United Nations Convention on the Law of the Sea and challenge its bullying and excessive maritime claims,” ​​Harris said.

The United Nations Convention on the Law of the Sea, or UNCLOS, is an international treaty that defines the rights and obligations of nations in space. It forms the basis of how international courts, such as the International Tribunal for the Law of the Sea, resolve maritime disputes.

Harris’ comment followed her speech in Singapore on Tuesday in which she said Beijing had continued to “force, intimidate and make claims on the vast majority of the South China Sea.”

The South China Sea is a resource-rich waterway that is a major merchant shipping route, carrying trillions of dollars of world trade every year. China claims almost all of the sea – parts of it have has also been claimed by some Southeast Asian countries such as Vietnam, Malaysia and the Philippines.

In 2016, a tribunal at China’s Permanent Arbitration Court dismissed the lawsuit as legally unfounded – a ruling Beijing ignored.

In answer At Harris’ speech in Singapore, Chinese state media accused the American vice president of attempting to drive a “wedge” between China and its Southeast Asian neighbors.

Prior to arriving in Vietnam on Tuesday evening, Vietnamese Prime Minister Pham Minh Chinh and the Chinese Ambassador to Vietnam held a previously unannounced meeting, Reuters reported. During the meeting, the Chinese ambassador pledged to donate two million doses of Covid-19 vaccine to Vietnam, according to the report.

“Biggest” geopolitical competition

While Harris was cautious about meeting Beijing, political analysts and former diplomats said there was little doubt their trip was part of US strategy to compete with China.

The rivalry between the US and China is currently the “biggest” geopolitical issue, said Kishore Mahbubani, a prominent former Singapore diplomat.

“So Vice President Kamala Harris’ visit is clearly part of the competition between the US and China,” Mahbubani, now a distinguished fellow at the National University of Singapore’s Asia Research Institute, told CNBC’s Street Signs Asia on Wednesday.

“Southeast Asia is going to be a very, very critical arena for this competition,” he said.

His opinion is shared by Curtis Chin, a former US ambassador to the Asian Development Bank. Chin said the rise of China was “a major foreign policy challenge” for the US and much of the world, even if the aftermath in Afghanistan continues.

The United States must have its eyes on Southeast Asia, and indeed much of Asia, not just the countries with which we have formal alliances.

Curtis Chin

Senior Fellow, Milken Institute

US President Joe Biden has been criticized for handling the withdrawal of US forces from Afghanistan. The issue overshadowed Harris’ trip to Southeast Asia as reporters focused their questions on Afghanistan at the Vice President’s joint press conference with Singapore Prime Minister Lee Hsien Loong on Monday.

“The United States needs to have its eyes on Southeast Asia, and indeed much of Asia, not just the countries we have formal alliances with,” Chin, a senior fellow at the Milken Institute, told CNBC’s Squawk Box Asia on Wednesday.

“And when I say all things considered, it’s not just diplomatic and military engagements, but real business engagements – that is what the United States needs to focus on,” he added.

Read more about developments in Afghanistan:

In her talks with Singapore’s Prime Minister, Harris discussed issues ranging from supply chains to climate change and the pandemic.

It announced in Vietnam that the US will donate an additional one million doses of Pfizer’s Covid vaccine – bringing the total US donation to the Southeast Asian country to six million doses. Harris also opened the new Southeast Asia Regional Office of the US Centers for Disease Control and Prevention in Hanoi.

The Vice President is due to end her trip to Southeast Asia on Thursday.

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Politics

Vice President Kamala Harris to go to Vietnam and Singapore amid tensions with China

U.S. Vice President Kamala Harris waves as she boards Air Force Two June 14, 2021 in Joint Base Andrews, Maryland.

Alex Wong | Getty Images

Vice President Kamala Harris will travel to Singapore and Vietnam next month to strengthen the U.S.’s relationship and economic ties with the Indo-Pacific region, the White House said in a statement on Friday. 

Harris will be the first U.S. vice president to visit Vietnam, and the highest-ranking official from the Biden administration to visit the Indo-Pacific, and Asia overall. Indo-Pacific refers to the region that lies between the Indian and Pacific Oceans, bordered by Japan, India and Australia.

The visit comes as the administration works to fortify regional ties with Southeast Asian nations, while pushing back on China’s influence in the region and globally. 

“President [Joe] Biden and Vice President Harris have made it a top priority to rebuild our global partnerships and keep our nation secure, and this upcoming visit continues that work — deepening our engagement in Southeast Asia,” Symone Sanders, senior advisor and chief spokesperson for Harris, said in the White House statement.

The White House did not provide details on the dates of the trip. It will also serve as Harris’ second international trip in office after she visited Guatemala and Mexico in June as part of her diplomatic efforts to address the root causes of migration to the U.S. 

Harris will meet with the leaders of Singapore and Vietnam to discuss regional security, climate change and the coronavirus pandemic, according to the White House. She will also discuss joint efforts with the leaders to “promote a rules-based international order.”

The announcement also comes just days after Defense Secretary Lloyd Austin’s own trip to Singapore, the Philippines and Vietnam, which focused on offering support to Southeast Asia nations as territorial rifts with China unfold. 

The vice president’s visit affirms the strength of the relationship between the U.S. and Singapore, according to a statement released on Friday by the press secretary to Singapore Prime Minister Lee Hsien Loong, the Business Times reported. 

Harris will meet with Singapore leaders to discuss ways to cooperate in areas such as defense, digital trade and cyber security, according to the Business Times. 

“I am delighted to welcome Vice-President Harris on her first official visit to Singapore,” the statement said, according to Business Times. “I look forward to our discussions on strengthening bilateral cooperation and working together on global challenges such as the Covid-19 pandemic and climate change.”

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Business

Asia’s greatest and worst inventory markets in Might battle Covid: India, Vietnam, Taiwan

Pedestrians wearing protective masks walk past the Bombay Stock Exchange (BSE) building in Mumbai, India, on Thursday, Jan. 21, 2021.

Dhiraj Singh | Bloomberg | Getty Images

India stocks were among Asia-Pacific’s top-performing markets in May, even as the country continues to grapple with tens of thousands of new cases every day.

For the month, the Nifty 50 rose 6.5% while the BSE Sensex was up 6.47%.

“The old phrase ‘go away and sell in May’ wasn’t true — at least for this month,” said Tuan Huynh, who is chief investment officer for Europe and Asia-Pacific at Deutsche Bank International Private Bank. “In the Indian case, I think it is relatively surprising.”

“The markets seem to like to differentiate between economic and obviously corporate earnings development versus then the rise of the new cases,” he told CNBC’s “Street Signs Asia” on Tuesday.

India has registered more than 28 million infections so far and is the second worst-hit country in the world in terms of caseload, according to data compiled by Johns Hopkins University. Daily cases have eased from the record high of over 400,000 at the start of May — but continue to hover above 100,000. That’s still quite high compared to other countries in the world.

U.S. investment bank Goldman Sachs is “overweight” on India, and expects stocks there to outperform.

“Markets tend to, as they say, live in the future and not in the present,” Timothy Moe, co-head of Asia macro research and chief Asia-Pacific equity strategist at Goldman Sachs, told CNBC last week.

He pointed out that there’s a “very concerning humanitarian crisis” in terms of a Covid surge in India. However, “the market is basically looking through that and expecting the rate of infections to come down, which indeed has taken place.”

Asia’s best and worst performers

Meanwhile, Vietnam was Asia-Pacific’s best-performing market in May — the VN Index jumping 7.15% for the month.

The gains came despite Vietnam’s Covid situation taking a turn for the worse in recent weeks. State-run media reported that social distancing measures were imposed in the country’s business hub Ho Chi Minh City starting Monday this week.

Elsewhere, stocks in Taiwan took a beating in May as rising cases of domestic infections prompted tighter restrictions.

The Taiex in Taiwan was Asia-Pacific’s worst performing market in May, and fell 2.84% for the month.

Taiwan was once hailed internationally for its initial response to the pandemic, which enabled life in Taiwan to remain largely undisturbed compared to elsewhere. However, a recent spike in infections has resulted in measures such as mandatory mask-wearing and limits on indoor and outdoor gatherings.

Total infections in both Vietnam and Taiwan remain comparatively low globally. Vietnam has reported more than 7,300 cases while Taiwan has seen at least 8,511 infections, according to Hopkins data.

Categories
Health

Provide chains could return to China amid Covid resurgence in India, Vietnam

The Covid-19 resurgence in some parts of Asia could lead to a change in fortunes for China, according to an economist.

Previously, the U.S.-China trade war caused companies to move their supply chains out of China, shifting their production and distribution networks for products and services. As a result, countries like Vietnam and India benefited as companies moved to set up shop in their countries.

But the situation appears to be changing, and supply chains could pivot back to China as cases spike in India and Vietnam, according to Zhang Zhiwei, chief economist at Pinpoint Asset Management.

Read more about China from CNBC Pro

“Before the pandemic, we saw factories moving out of China — Samsung, Foxconn these big name companies — setting up factories in Vietnam, India,” he told CNBC’s “Street Signs Asia” on Monday.

The spike in cases in those two countries has forced factories owned by Taiwanese contract manufacturer Foxconn, a major Apple supplier, to shut down facilities in India and Vietnam, he said.

“This could put the relocation of supply chains on hold for quite some time. The key issue here is that international travel is suspended, so multinational companies can’t send their staff to India and Vietnam to set up new factories,” Zhang added.

Cases in India surged to record-breaking highs in April and shows little signs of abating significantly —economists have predicted the South Asian economy will likely contract this quarter.

In Vietnam, the northern province of Bac Giang on Tuesday ordered four industrial parks — including three that house production facilities of Taiwan’s Foxconn — to temporarily shut down due to an outbreak of Covid-19.

The situation could benefit China, Zhang suggested. However, he pointed out that the extent of how much China could stand to gain will depend on how long the situation in India and Vietnam continues for.

Right now, export growth in China is between 20% to 40% a month, he said. If the factories in India and Vietnam return to production very soon, China’s exports would be expected to slow down in the second half of the year as companies move their manufacturing to those two countries.

“But if supply chain (in India and Vietnam) is disrupted for a long time, we could see this kind of 20%, 30% export growth (in China) to continue into next year,” Zhang said.