Survey: Hong Kong laws contribute to decline in media freedom

BANGKOK — Press freedom in Hong Kong is at its lowest level in at least 11 years, according to the latest survey of its members and the public by the Hong Kong Journalists Association.

One of the biggest factors in that decline is the introduction this year of Article 23, which penalizes anything deemed as sedition or external interference, the association, known as the HKJA, found.

The law has “more severe restrictions on media” than previously existed, Selina Cheng, chair of the HKJA, told VOA. It includes substantially tougher penalties for sedition, which Cheng described as “the main legislation that’s been used against speech and media work” since the implementation of a new National Security Law in 2020.

The findings are part of an annual survey by the HKJA in conjunction with the Hong Kong Public Opinion Research Institute. The journalists association sent surveys to 979 members, and the research institute collected opinions from 1,000 phone interviews, selected at random.

Both groups surveyed were asked to rank press freedom in Hong Kong. The 250 journalists who responded to the survey ranked it at  25 out of 100, with 100 being a perfect score. It is the lowest ranking since the annual survey was started 11 years ago. The public score came in at 42.

The survey findings came the same week that Hong Kong denied a work visa to journalist Haze Fan. The reporter for Bloomberg News was detained in Beijing on alleged national security violations in December 2020 and held for about 13 months. Bloomberg has said Fan will be transferred to its London office.

In the HKJA survey, 92% of the journalists who responded to the survey indicated press freedom had “significantly” been impacted by the Safeguarding National Security Ordinance, known as Article 23.

Passed in March, it prohibits acts of treason, secession, sedition, subversion and theft of state secrets, and prevents foreign political organizations from conducting activities or establishing ties with local political bodies in Hong Kong.

Penalties for sedition under the new law increased from two to seven years, or 10 years if a foreign force is involved.

Authorities have insisted that journalists are safe to carry out what they call “legitimate” reporting activities. But critics say the vaguely worded legislation creates uncertainty for journalists.

Cheng said the law’s reference to state secrets is wide, too, which could be a concern.

The law is using Beijing’s definition of state secrets, according to Human Rights Watch.

Under Article 23, what is deemed a state secret “encompasses [a] pretty wide spectrum of things, including information about economy, technology, society, so on,” Cheng said.

“It could be that the government considers the findings of a think tank or an academic institution a state secret, then that would become a crime of national security,” she said.

China’s Ministry of Foreign Affairs responded to the HKJA findings, saying Hong Kong’s national security laws are not meant to target journalists who do not break the law.

Cheng noted that only about a quarter of HKJA members responded to the survey this year, which could be a sign of how the media environment is declining.

“The response rate is not great and is a reflection of the sort of self-censorship even when it comes to discussing or reflecting reporters’ views on press freedom,” she told VOA.

“At some organizations that might be seen as more pro-Beijing or pro-government reporters, the contact people we have at those organizations will worry if they might face retaliation if they send out [the] HKJA questionnaire. I think people are scared to do it, because they’re afraid of retaliation,” she said. 

Cheng believes she personally was retaliated against for her association with the HKJA. Her contract at The Wall Street Journal, where she covered the auto and electric vehicle industry, was terminated in July, in a move she said is connected to her being elected chair of the HKJA.

In a statement issued at the time, Cheng said she had been told by her supervisor that having Journal employees advocate for media freedoms would create conflicts of interest because the newspaper reports on related topics, including the ongoing trials of Hong Kong journalists and media organizations.

The Journal confirmed to VOA at the time that personnel changes had been made but said it could not comment on “specific individuals.”

Journalists also highlighted overt calls for journalists to use caution in their reporting.

In a note to columnists at the pro-Beijing Ming Pao newspaper, chief editor Lau Chung-yung urged people to be “prudent” and “law abiding” in their writing. His note was posted on social media on August 15 by one of the paper’s columnists.

Eric Wishart, the standards and ethics editor at Agence France-Presse in Hong Kong, says such comments concern journalists.

The Ming Pao note, he said, “is another example of the chilling effect that recent developments have had on journalism in Hong Kong.” 

Johan Nylander, a Swedish journalist in Hong Kong, said it is no surprise that press freedom is at a new low.

“The national security law and Article 23 have created an atmosphere of uncertainty and self-censorship among many reporters and media companies,” he told VOA.

“It’s quite clear where the trend is going. The situation regarding press freedom is very depressing in Hong Kong, and nothing indicates that it will get better anytime soon.”

Media groups such as the HKJA have been criticized by authorities and Chinese state media for allegedly having links to activist organizations.

But Wishart said it was important for the HKJA to continue.

“It’s important that the HKJA and other organizations continue to monitor the state of press freedom in Hong Kong and that media professionals continue to respond to these surveys,” he said.

Hong Kong’s ranking on the World Press Freedom Index has declined rapidly since the national security law was enacted in 2020.

It currently ranks 135 out of 180 on the Reporters Without Borders index, where number 1 represents the best environment. In 2019, the year before the national security law took effect, Hong Kong ranked 73.

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Taiwan sentences 8 military officers to prison for spying for China

Washington — The Taiwan High Court on Thursday sentenced eight Taiwanese military officers to prison for spying for China in exchange for financial gain. Experts say the case shows a shift in China’s espionage tactics in Taiwan.

The sentences range from 18 months to 13 years in prison, making it one of Taiwan’s largest espionage cases in years.

The court said in a statement that the defendants were “willing to collect intelligence for China that caused the leak of important secrets” and that “they were seduced by money.”

An individual named Chen Yuxin was found to have contacted and recruited the defendants at key military sites to form a spy network for China. Chen was believed to have fled to China and remained there.

The defendants were also accused of planning to fly a CH-47 Chinook military helicopter to a Chinese aircraft carrier in the Taiwan Strait and of shooting a video indicating they would surrender to Beijing in the event of war, according to Taiwan’s official Central News Agency. Beijing used virtual currency to make payments to the defendants, according to Bloomberg.

Timothy Heath, a senior international defense researcher with the RAND Corporation, told VOA in an email, “The impact could have been severe if Taiwan’s authorities did not stop the espionage and defection of military assets like a helicopter in time.

“It is demoralizing to read of Taiwan soldiers voluntarily making videos that advertise their willingness to surrender to China,” he said.

Other cases of spying

The sentencing of the eight military officers is the latest in a growing number of espionage cases authorities say were carried out by China on the democratically ruled island.

Russell Hsiao, executive director of the Global Taiwan Institute and senior fellow at the Jamestown Foundation, said the sentences on Thursday reflect a shift in tactics by Chinese intelligence.

“This group of convicted agents involves relatively younger persons than in prior cases that have often targeted older retirees from the military,” he said in an email to VOA.

He said that while the older targets in previous cases were more driven by a mix of ideology reinforced by financial gains, “the motivation of these recent cases appears to be primarily financial.”

He also noted that while the sentences handed down by the court are arguably more severe than in prior cases, given the relatively limited value of the intelligence collected and passed on by these agents, this may be intended to send a deterrent signal to would-be spies.

China claims democratic Taiwan as its territory and has ramped up military and political pressure in the Taiwan Strait in recent years. The two sides have been spying on each other for decades.

Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, said, “This is not a foreign policy issue, but a question concerning the two sides of the Taiwan Strait, which belong to the one and same China.”

Hsiao said there has been an upward trend in espionage cases involving Taiwan military personnel over the past decade.

Taiwan’s Control Yuan, the government’s oversight branch, confirmed this on Thursday. In a statement, it said that in recent years, there has been a significant increase in the number of espionage-related cases uncovered by Taiwan’s military security units, and the targets and forms of infiltration are different from those in the past.

The Control Yuan statement said that from 2011 to 2023, there were 40 espionage cases, three times the number from 2001 to 2010. Those cases involved a total of 113 military and civilian personnel, and many “top secrets” were leaked.

“This certainly shows that Beijing is intent on penetrating Taiwan’s military and security services, so Taipei will have to stay vigilant against these efforts in the years ahead,” Zack Cooper, a senior fellow at the American Enterprise Institute, told VOA in an email.

A Taiwanese sergeant who worked at a navy training center was indicted last month for allegedly photographing and leaking confidential defense information to Beijing.

In June, the court upheld the sentences given to two retired Taiwanese Air Force officers for helping or attempting to help China recruit intelligence assets in Taiwan.

“The cases show that Chinese-directed subversion and espionage remain major threats to Taiwan,” Heath said. “The biggest impact is the continued erosion of the public’s trust and even U.S. trust in Taiwan’s government and military to control the threat of Chinese subversion and espionage.”

In its statement, the Control Yuan urged Taiwan’s government to increase its defense budget to help prevent China’s espionage activities.

Taiwan’s Cabinet announced Thursday that defense spending for 2025 would increase by 7.7% to $20.25 billion.

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Trials ordered in 20-year-old Thailand military, police ‘massacre’

Bangkok  — A court in Buddhist-majority Thailand decided Friday to try seven former military and police officials for their roles in the deaths of 85 Muslim men at a protest that took place 20 years ago.

The seven are charged with murder, attempted murder and unlawful detention. The statute of limitations on the charges expires in late October, exactly two decades after the events of the so-called Tak Bai Massacre.

“I feel relieved that the duty of the lawyers and the duty of the plaintiffs is accomplished,” Pornpen Khongkachonkiet, a human rights activist and lawyer representing one of the plaintiffs in the case, told VOA after the court announced its decision.

“We [were] hugging each other … and I think they are very happy,” she said of the other plaintiffs as well.

Lawyers for the accused could not be reached for comment.

The case concerns the events of October 25, 2004, in Tak Bai district, Narathiwat province, in Thailand’s predominantly Muslim and ethnic Malay deep south.

Soldiers and police shot and killed seven people while responding to a protest demanding the release of suspected Islamic militants. Human rights groups say the officers forced many more protesters into police trucks destined for a military camp some 140 kilometers away, leaving them packed inside and forced to lie on top of one another for hours. Seventy-eight of them died.

A state inquest later determined that they had suffocated. It also concluded that security forces used inappropriate measures to disperse the protesters and that commanding officers failed to adequately supervise the movement of the detainees. But authorities did not pursue charges and police claimed force majeure, a legal term referring to events beyond their control.

No one was ever previously charged over the deaths or injuries.

Hoping to change that, 48 survivors and relatives of the dead filed a lawsuit with the Narathiwat provincial court in April against nine officers, all since retired, involved in the security forces’ response to the protest.

Pornpen said the court on Friday decided against taking two of the nine to trial on the grounds they were not responsible for use of force.

Even so, she said the court’s decision to put the other seven on trial was a welcome surprise in a country where senior police, military and government officials are widely seen to act with impunity.

“We had so many times in history that the call for democracy, call for change, anything like [a] protest always ends up with violence and no one is [held] responsible,” she said. “So, to bring the perpetrator to justice according to Thai law is not easy, and I think we did it.”

In a statement, Amnesty International called Friday’s decision an overdue but “crucial first step towards justice” for those who suffered what it called the “excessive use of force” at the 2004 protest.

“The victims and their loved ones have spent almost two decades waiting for justice and accountability for the heinous crimes committed,” the rights group said. “Thai authorities must immediately enforce the court decision and take necessary measures to ensure the case’s statute of limitations does not expire.”

Amnesty International said at least one of the defendants must be brought to court to hear the charges by October 25 for the case to proceed to trial.

Pornpen confirmed that the defendants must still appear in court before the statute of limitations runs out for the trial to proceed.

She said the court would issue subpoenas ordering the accused to appear on September 12, but was concerned they may try to stall and avoid an appearance until the statute of limitations runs out.

Anchana Heemmina, director of the Duay Jai Group, a non-profit that monitors human rights abuses in Thailand’s deep south, said she also worried the accused may yet avoid a trial.

But she welcomed Friday’s decision nonetheless and said it could begin to restore some faith in the courts among southern Thailand’s Muslims.

“They feel like the Thai government, or the military don’t want to protect Malay Muslims who are civilians in the country and feel like we are the second class,” said Anchana.

“Now, for today, for the Tak Bai case, it’s a little bit first step that makes the people believe or trust the justice system,” she added.

Once the seat of a Muslim sultanate, the southern provinces of modern-day Thailand were deeded by the British to the then-kingdom of Siam in 1909. Rejecting the transfer, several armed ethnic Malay Muslim groups have waged a long-running guerrilla war against the Thai state in hopes of winning independence for the provinces.

More than 7,000 people have died in related violence since fighting intensified in 2004.

While bombings, assassinations and shootouts across the south continue to occur alongside police raids and arrests, the pace of the violence has waned over the years, and the government is in talks with some of the rebel groups over terms of a possible cease-fire.

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27 killed after bus with Indian pilgrims drives off Nepal highway  

KATHMANDU, Nepal — At least 27 people were killed and 16 others injured when a bus carrying dozens of Indian pilgrims drove off a key highway and crashed on Friday in Nepal, officials said.

The bus veered off Prithvi Highway and rolled toward a fast-flowing river. Its roof was ripped open before stopping on the rocky bank just shy of the Marsyangdi’s rushing, murky water.

Rescue workers recovered 27 bodies from the wreckage and flew the 16 injured to the capital Kathmandu for treatment, according to Armed Police Force spokesperson Shailendra Thapa.

The wreckage was found near Abukhaireni, a town about 120 kilometers (75 miles) west of the capital, Kathmandu and the river. It would be removed only on Saturday as it was already dark and recovery was difficult, Thapa said.

There were 43 people on board the bus and all of them were Indian nationals, confirmed the Indian Embassy in Kathmandu. The embassy also said the bus fell about 150 meters (500 feet) from the highway, and they were coordinating with local authorities undertaking relief and rescue operations.

The bus from the neighboring Indian town of Gorakhpur was heading toward Kathmandu from the resort town of Pokhara on Friday when it drove off the highway midway through the journey.

Tens of thousands of Hindu pilgrims from neighboring India visit Nepal every year to visit Hindu shrines. Nepal is a Hindu-majority country. Local news reports said the pilgrims on the bus were also heading toward Kathmandu to visit the Pashupatinath, the revered temple of Hindu god Shiva.

In July, two buses were swept by landslides not too far from Friday’s accident site. Of the 65 people on board those two buses, only three survived and only about half the bodies were recovered. The wreckage of those buses has not been found yet but authorities have continued to search.

The Monsoon season that begins in June and stretches up to September brings heavy rainfall to Nepal triggering landslides and flooding. The heavy rainfall also swells the rivers and adds speed to the generally fast-flowing rivers due to the mountainous terrain. The season also turns rivers murky brown, making any search mission difficult.

Rescuers used divers, scanners and even heavy magnets to try to locate the wreckage but no traces were found.

Bus accidents in Nepal are mostly due to poorly maintained roads and vehicles and much of the country is covered by mountains with narrow roads.

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US national security adviser to hold talks with Chinese foreign minister in China next week 

State Department — U.S. President Joe Biden’s national security adviser, Jake Sullivan, is heading to China next week for talks with Chinese Foreign Minister Wang Yi, according to sources familiar with the plan.

The discussions are expected to include a potential meeting between Biden and Chinese President Xi Jinping later this year.

This would be Sullivan’s first trip to China as the White House national security adviser. The planned meetings would be the latest in a series of high-level diplomatic moves aimed at stabilizing U.S.-China relations.

The talks, described as broad and strategic, would come after China suspended discussions with the U.S. on nuclear safety and security. China said in July it had halted nascent arms-control talks with Washington.

“The U.S. would like to deepen discussions on strategic stability, but the Chinese are reluctant. They prefer to discuss an agreement on the no first use of nuclear weapons, but the United States is not prepared to adopt such a doctrine,” former CIA China analyst Dennis Wilder, now a Georgetown University professor, told VOA.

“As a result, there’s been a bit of an impasse, with little progress made in the few working group meetings that have occurred,” he said.

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China, Belarus agree to strengthen cooperation in trade, security

BEIJING — China and Belarus have agreed to strengthen cooperation in a range of sectors including trade, security, energy and finance, according to a joint statement, after Chinese Premier Li Qiang met Belarusian Prime Minister Roman Golovchenko in Minsk.

The statement released on Friday, a day after the Minsk meeting, said both countries would also strengthen cooperation in industrial supply chains and continue to enhance trade facilitation to reduce costs for both ends.

Belarus also intends to deepen cooperation with the Guangdong-Hong Kong-Macau Greater Bay Area, a megalopolis which covers nine cities including Guangzhou, Shenzhen and Zhuhai, said the statement published by China’s foreign ministry.

According to the China Daily, Belarus was among the first group of countries that responded to China’s Belt and Road Initiative and Li said during his visit to Minsk that China-Belarus relations had remained vibrant for the past 32 years despite the changing international landscape.

China is the second-largest trading partner of Belarus and its largest trading partner in Asia, with bilateral trade exceeding $8.4 billion last year, said the China Daily.

Li arrived in Belarus on Thursday after wrapping up his first visit to Russia as Chinese premier. 

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Kiribati’s pro-China government bars foreign officials from visiting until 2025, citing elections

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US trial begins over diaries of Chairman Mao’s secretary

washington / oakland, california — A trial got underway this week in Oakland, California, to decide the ownership of diaries written by Li Rui, a former secretary to communist China’s founder Mao Zedong, who became a vocal critic of the Chinese Communist Party. 

The trial will decide if Stanford University gets to keep the diaries donated by Li’s daughter or if they should go to Li’s widow, Zhang Yuzhen, his second wife, who is suing for the documents to be returned.  

The university’s legal team and U.S.-based China scholars suspect Zhang’s lawsuit is bankrolled by Chinese authorities who aim to control the sensitive historic narrative on Mao and the Communist party.  

“Li Rui is a living encyclopedia of the 80-year history of the Chinese Communist Party,” Cai Xia, a former professor at Beijing’s Central Party School who lives in the U.S., said in emailed replies to VOA Mandarin. “The Chinese Communist Party knows that the diaries contain history that cannot be exposed to the sunlight. Beijing will fight [to get] the diaries back at all costs.”  

10 million words

Li wrote about 10 million words in scores of diaries, letters and notes during his lifetime, including criticism of Mao, the party and the 1989 Tiananmen Square Massacre.  

On June 4, 1989, when Chinese leader Deng Xiaoping ordered the military to clear pro-democracy protesters from Tiananmen Square, killing hundreds if not thousands, Li wrote, “I am restless all day long, and I always want to cry.” 

On January 9, 2010, he wrote, “Mao’s actions are totally contrary to the universal values of freedom, democracy, scientific progress, and the rule of law.”  

Li also criticized China’s current leader, President Xi Jinping.  

In 2018, when China began removing term limits for Xi, he quoted in his diary a foreign media report, “Democracy Is Dead.”  

In an interview with VOA Mandarin from his hospital bed that year, Li expressed disappointment with what he called Xi’s “low education.” 

Li’s daughter Li Nanyang, a U.S. citizen, says before he died in 2019, she gave about 40 boxes of his documents to Stanford’s Hoover Institution, citing his wishes that they be preserved there, and she became a visiting fellow.

Zhang, Li’s widow, claims Li Nanyang exercised “undue influence” over her father and has denied any plan to suppress information in the documents other than “personal” information. She has also said Stanford can make copies of the documents. But Hoover Institute scholars argue that copies would lack the authenticity of the originals.

Zhang sued Stanford and Li Nanyang in 2019 in Beijing’s Xicheng District Court, which awarded the ownership of the documents to Zhang and ordered the university to return them within 30 days. Li Nanyang did not attend that trial.  

Stanford that same year brought a “quiet title claim” against Zhang in the U.S., asking a federal court to step in and affirm its right to Li Rui’s archive.

Zhang hired an American lawyer and filed a counterclaim against Stanford and Li Nanyang in 2020, saying Li Nanyang “stole” personal information and “national treasures.” She accused Li Rui’s daughter and the university of “copyright infringement,” “public disclosure of private facts” and “intentional infliction of emotional distress.” 

Zhang’s lawyer in 2021 denied any involvement by the Chinese Communist Party (CCP) in supporting Zhang, despite lingering suspicions.

“I believed that from the beginning,” said Perry Link, a well-known sinologist and distinguished professor at the University of California, Riverside, to reporters outside the court Tuesday, a day before giving his testimony. “I am also prepared to present this argument in my testimony [that] the CCP is behind it.” 

Link added that the party’s role is “so clear now that I don’t think I’d have to make that argument. I mean [Zhang] herself said that she doesn’t have the money or the will” to pursue a lawsuit. 

Suspicions

On the second day of trial, Li Nanyang reiterated that her father had handed the diaries to Stanford University of his own free will. 

Li Nanyang expressed her own suspicions about the case, first in a group email to friends, but her comments were then picked up by several Chinese media in May. She said she believes the CCP and the Chinese government are interested only in “covering up the truth” in order to “ensure that the image of the Communist Party will always be ‘great, glorious, and correct,’ and that it will always be able to govern.”  

VOA Mandarin contacted the Chinese Consulate in San Francisco for a response but didn’t receive one by the time of publication. 

Kicked out of party

Born in 1917, Li Rui enthusiastically threw himself into the revolution that saw China’s Communist Party seize power in 1949. In the mid-1950s, he briefly served as Mao’s secretary before a falling out that led to his being kicked out of the party and sentenced to eight years in prison.  

When Li Rui was released in 1979, three years after Mao’s death, he was rehabilitated back into the party and promoted to executive deputy director of the Organization Department of the CCP Central Committee, responsible for selecting senior CCP officials.  

In his later years, he became an outspoken critic of the CCP, calling for political reform and democratic constitutionalism, and was recognized as a liberal figure within the CCP, despite his often sharp criticism. 

The Oakland trial will run through the end of the month. 

Adrianna Zhang contributed to this report.

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North Korea slams ‘provocative’ US sale of Apache helicopters to South Korea

seoul, south korea — North Korea’s foreign ministry denounced a U.S. planned sale of Apache helicopters to South Korea, state media KCNA said on Friday, vowing to take additional steps to bolster its self-defense.

The Pentagon said on Monday that the U.S. State Department has approved the potential sale of Apache helicopters and related logistics and support to South Korea for an estimated $3.5 billion.

An unnamed senior official in charge of foreign news at North Korea’s foreign ministry issued a press statement on Thursday criticizing the sale plan as a move to aggravate tension, alongside ongoing annual military drills by the allies.

“This is a reckless provocative act of deliberately increasing the security instability in the region,” the official said, according to KCNA.  

The official accused Washington of escalating military confrontation, “disturbing the military balance and thus increasing the danger of a new conflict” in the region by supplying lethal weapons to its allies and friends.  

Pyongyang’s “strategic deterrence will be further strengthened to protect the national security and interests and the regional peace,” the statement said, pledging to steadily conduct military activities to boost self-defense.  

 

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Taiwan president to visit front-line islands at center of China tensions

Taipei, Taiwan — Taiwan President Lai Ching-te will on Friday make his first visit since taking office in May to the sensitive Kinmen islands that sit next to the Chinese coast and have been the scene of stepped up tensions between Taipei and Beijing.

Taiwan has controlled Kinmen, and the Matsu islands further up the Chinese coast, since the defeated Republic of China government fled to Taipei in 1949 after losing a civil war with Mao Zedong’s communists. No peace treaty or armistice has ever been signed.

The scene of on-off fighting during the height of the Cold War, China’s coast guard has since February conducted regular patrols around Kinmen following the death of two Chinese people on a speedboat which Beijing blamed on Taipei.

Lai’s office said on Thursday that he would travel to Kinmen on Friday for events marking the 66th anniversary of a key military clash with Chinese forces, better known internationally as the start of the second Taiwan Strait crisis.

“Located in the first island chain, Taiwan faces the immediate threat of China. But Taiwan will not be intimidated,” Lai told a security forum in Taipei on Wednesday.

China views democratically-governed Taiwan as its own territory and has repeatedly denounced Lai as a “separatist.” He rejects Beijing’s sovereignty saying only Taiwan’s people can decide their future, but has also offered talks with China.

Kinmen faces the Chinese cities of Xiamen and Quanzhou and at its closest is less than two kilometers away from Chinese-controlled territory.

The 1958 crisis was the last time Taiwanese forces battled China on a large scale.  

In August of that year, Chinese forces began more than a month of bombardment of Kinmen, along with Matsu, including naval and air battles, seeking to force them into submission.

Taiwan fought back at the time with support from the United States, which sent military equipment like advanced Sidewinder anti-aircraft missiles, giving Taiwan a technological edge.

The crisis ended in a stalemate, and Taiwan observes Aug. 23 every year as the date it fended off the Chinese attack.

Late Wednesday, Taiwan’s defense ministry held a concert in Taipei that celebrated the “glorious” anniversary, with songs about shooting down Chinese MiG fighter jets and bemoaning the “red catastrophe” of communism.

Formerly called Quemoy in English, Kinmen today is a popular tourist destination, though Taiwan maintains a significant military presence.

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Taiwan defense spending to outpace GDP growth as China threat rises

TAIPEI, Taiwan — Taiwan’s defense spending will rise 7.7% next year, outpacing expected economic growth, the Cabinet said on Thursday, as the island adds more fighter jets and missiles to strengthen deterrence against a rising threat from Beijing.

China, which views democratically governed Taiwan as its own territory, has ramped up military and political pressure over the past five years to assert those claims, which Taipei strongly rejects.

Taiwan’s Cabinet said following a regular weekly meeting that 2025 defense spending would rise 7.7% year-on-year to $20.25 billion, accounting for 2.45% of gross domestic product and exceeding the government’s expectation for economic growth of 3.26% for the year.

The spending includes a special budget worth $2.8 billion to buy new fighter jets and ramp up missile production. That was part of the military’s extra spending worth $7.5 billion announced in 2021 over five years.

Taiwan’s government has made military modernization a key policy platform and has repeatedly pledged to spend more on its defenses given the rising threat from China, including developing made-in-Taiwan submarines.

China’s air force flies almost daily missions into the skies near Taiwan, and in May staged war games around the island shortly after President Lai Ching-te took office, a man Beijing brands a “separatist.” Lai rejects China’s sovereignty claims, saying only Taiwan’s people can decide their future.

The budget will still need to be passed by parliament, where the ruling Democratic Progressive Party (DPP) lost its majority in January elections.

Taiwan’s main opposition party, the Kuomintang, has repeatedly expressed its support for firming up the island’s defenses, though it is currently involved in a standoff with the DPP about contested reforms to give parliament greater oversight powers the government says is unconstitutional.

China is also rapidly modernizing its armed forces, with new aircraft carriers, stealth fighter jets and missiles.

China in March announced a 7.2% rise in defense spending for this year to $234.10 billion outpacing the economic growth target of around 5% for 2024, though accounting for only some 1.3% of GDP according to analysts. 

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Senior US officials meet Dalai Lama in New York

washington — Senior U.S. officials met with the Dalai Lama in New York on Wednesday, according to a State Department statement, a rare high-level direct meeting between Washington and the exiled Tibetan spiritual leader.

The Dalai Lama, who is denounced by Beijing as a separatist, met with senior U.S. State Department official Uzra Zeya and White House National Security Council official Kelly Razzouk in New York, where he is visiting to receive medical treatment.

During the meeting, Zeya “reaffirmed the U.S. commitment to advancing the human rights of Tibetans and supporting efforts to preserve their distinct historical, linguistic, cultural, and religious heritage.”

Beijing imposes strict controls on Tibet, which it considers an inalienable part of its territory, and denounces the Dalai Lama, who advocates for greater autonomy for Tibet, as a rebel.

During the meeting on Wednesday, Zeya also discussed U.S. “support for resuming dialogue between the PRC and His Holiness and his representatives,” the statement said, using the abbreviation for the People’s Republic of China.

Talks between Beijing and Tibetan leaders have been frozen since 2010.

The Dalai Lama, 89, received knee surgery in New York this year, saying he was recovering well in a statement released in July.

He stepped down as his people’s political head in 2011, passing the baton of secular power to a government chosen democratically by some 130,000 Tibetans around the world.

In July, China sanctioned a U.S. lawmaker for “interference” over his support for Tibetans, a month after the U.S. Congress passed a law strengthening support for Tibet and senior U.S. lawmakers met with the Dalai Lama in India.

China took control of Tibet in 1951 before the Dalai Lama fled into exile in 1959.

Tibet had previously been largely autonomous, following the fall of the Qing dynasty, which lasted three centuries.

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New York man accused of spying on Chinese dissidents, DOJ says

WASHINGTON — A New York man was charged on Wednesday with operating as an illegal agent of the Chinese government in the United States, accusing him of spying on Chinese pro-Democracy activists and dissidents, the Justice Department said.

The DOJ alleges that Yuanjun Tang, 67, acted as a Chinese agent between 2018 and 2023 at the direction of China’s Ministry of State Security, its principal intelligence agency.

Tang gave to MSS intelligence officers information about individuals and groups viewed by China “as potentially adverse” to its interests, including prominent U.S.-based Chinese dissidents, the DOJ said.

He helped MSS infiltrate a group chat on an encrypted messaging application used by numerous Chinese dissidents, the DOJ said.

Tang is also accused of making false statements to the FBI when he claimed he was no longer able to access an email account used to communicate with his MSS handler, the department said.

Tang is a former Chinese citizen who was imprisoned for his activities as a dissident, according to the department. He was granted political asylum in the U.S. and later became a citizen.

The Chinese Embassy did not immediately respond to a request for comment. Reuters was unable to contact Tang.

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US Pacific territories near status upgrade at islands summit

WASHINGTON — Two U.S. Pacific territories are moving closer to a status upgrade from observer to associate member, elevating their status within the region’s political and economic policy organization, the Pacific Islands Forum.

The PIF leaders’ meeting is set to open Monday in Tonga’s capital, Nuku’alofa.

Tongan Prime Minister Siaosi Sovaleni has confirmed there will be a vote on new associate members. “Guam and American Samoa have applied,” he told ABC Pacific recently. “We’ll be actually tabling a paper for the leaders to consider.”

Foreign ministers from the Pacific bloc reviewed the applications for associate member status from the two U.S. territories during their meeting on August 9. Cook Islands Prime Minister Mark Brown noted that there is “widespread support” for the applications.

On Tuesday, forum leaders will engage in talks with United Nations Secretary-General Antonio Guterres, associate members and forum observers. A senior State Department official will represent the United States.

The Pacific Islands Forum has 18 member states, with Australia and New Zealand being the largest economies in the bloc. Neither the United States nor China is a full member, but both countries are dialogue partners.

U.S. greenlights

Until recently, U.S. Pacific territories Guam, American Samoa and the Northern Mariana Islands held observer status for the forum.

In June, however, the U.S. government eased restrictions, allowing these territories to join the PIF as nonvoting associate members, provided they do not take foreign policy positions. This change modified a longstanding policy that had previously barred their participation in international organizations.

Although the French territories of French Polynesia and New Caledonia have become full PIF members, analysts currently do not anticipate that U.S. Pacific territories will be approved for full membership soon.

“It would be a bit like Nebraska voting at the United Nations,” Cleo Paskal, a senior fellow at the Washington-based Foundation for Defense of Democracies, told VOA.

“The degree to which constituent parts of the U.S., such as Guam and American Samoa, can participate as full members in multilateral organizations is complex,” she said. “On one hand, the people of those islands understandably want to be represented in a forum that claims to speak for the region. On the other, they can’t legally sign up to foreign policy positions for the U.S.”

U.S.-PIF summit

A State Department spokesperson told VOA that the United States has made broader and deeper engagement with the Pacific Islands a key priority of its foreign policy.

The spokesperson cited the U.S.-hosted summit meetings with Pacific Island leaders in Washington in September 2022 and 2023.

But neither the White House nor the State Department would confirm whether a third U.S.-Pacific Island Forum summit will take place this year.

In recent years, U.S. policymakers have recognized that U.S. presence and influence in the Pacific cannot be taken for granted, especially in the face of increased Chinese interest and engagement in the region, according to Kathryn Paik, a senior fellow at the Center for Strategic and International Studies.

Paik recently wrote in a CSIS publication that Washington’s realization has led to a series of high-level visits, the opening of several new embassies, the return of the Peace Corps to the region, and numerous financial initiatives across the fisheries, health, law enforcement and economic sectors.

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Investigation sought after influential Thai general hits journalist

BANGKOK — A senator in Thailand on Tuesday formally requested a parliamentary investigation into a veteran politician and former army chief who struck a television reporter on the head after she asked him a question.

Prawit Wongsuwon, 79, a lawmaker and former deputy premier who was involved in the last two coups in Thailand, hit the female reporter on Friday while surrounded by journalists, video footage of which was widely circulated.

A notorious political dealmaker and a central figure in Thailand’s two decades of political strife, Prawit, who leads the Palang Pracharat Party, served in the last junta and was deputy prime minister for nine years after a 2014 coup.

“This behavior is physical harassment,” said Senator Tewarit Maneechai, who told Reuters he had requested an ethics probe be conducted into Prawit.

“It is also disrespectful to a journalist who was doing her work,” he added.

Palang Pracharat Party spokesman Piya Tavichai said Prawit knew the reporter well and has apologized, adding he could clarify the facts in any parliamentary process.

“He was teasing her as someone who he is close to,” Piya said.

“Because he was a soldier, the teasing could appear to be violent but those close to him know that he teases like this all the time.”

Prawit and the reporter, who works for broadcaster Thai PBS, could not be reached for comment.

The incident sparked widespread condemnation from Thailand’s media community. Thai PBS asked Prawit to take responsibility for his actions.

Senator Tewarit said he requested an investigation into Prawit through the Senate to be conveyed to the lower house of parliament, which will have 30 days to respond. He said he was unsure what penalty Prawit would face if found guilty.

The ethics code for Thai parliamentarians states members should respect the rights and liberty of others and refrain from threats, showing malice or use of force to harm others.

The incident happened on Friday moments after the Pheu Thai Party’s Paetongtarn Shinawatra won a vote in parliament to become prime minister, Thailand’s third premier from the billionaire Shinawatra family, with which Prawit has a bitter history.

Prawit, who did not attend the vote, was asked his thoughts on Paetongtarn’s victory, to which he replied “What are you asking? What are you asking?” before striking the reporter, television footage showed.

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Indonesia searches for ways to balance domestic industries with surging Chinese imports

JAKARTA, Indonesia — A flood of Chinese products into Indonesia has hit local manufacturers hard, prompting the government to look for ways to placate domestic producers while avoiding angering the country’s biggest trading partner.

Garment makers — both home-based piecework producers and factories — have appealed for help as they lose market share to low-cost apparel and textiles from China. A surge of products bought online has added to the problem.

A protest by workers in Jakarta prompted Indonesian Minister of Trade Zulkifli Hasan to announce in July that the government will impose import tariffs of up to 200% on some products from China, particularly textiles, clothing, footwear, electronics, ceramics and cosmetics, to try to protect local businesses and prevent layoffs.

“The United States can impose a 200% tariff on imported ceramics or clothes, so we can do it as well,” Zulkifli said, to ensure micro, small, and medium-sized enterprises and industries “survive and thrive.”

But China is Indonesia’s largest trading partner, with two-way trade exceeding $127 billion in 2023. Imposing higher tariffs could prompt Chinese manufacturers to invest in more in factories in Indonesia, but could also backfire, leading Beijing to retaliate. As a result, the government announced in July that it was setting up a task force to monitor and handle problems related to certain imports.

It’s an urgent matter, Hasan said, given the flood of imported products that has caused closures of textile factories and mass layoffs. From January to July 2024, at least 12 textile factories shut down operations, causing more than 12,000 workers to lose their jobs, according to the Nusantara Trade Union Confederation.

In Bandung district in Indonesia’s West Java province — an area famous for textiles such as batiks, handwoven fabrics and silks — imports of Chinese products have left thousands of workers idle and without regular incomes, said Neng Wati, a manager at manufacturing company Asnur Konveksi.

“Now they take turns. The number of workers stays the same, but the work is divided up and not all get some. Some of them have been off for two weeks, some of them haven’t gotten work for a month,” Wati said.

That’s a hard blow coming after the slow days of the COVID-19 pandemic, when many workers were shifted to e-commerce to make ends meet, said Nandi Herdiaman, head of a local organization of small- and medium-sized entrepreneurs. Only 60% of the 8,000 members of the association kept working after the pandemic.

Now, the biggest challenge is cheap imports from China. In the past two months, output from home-based industries has fallen by 70%, the industry organization says.

The uptick in imports of Chinese products is partly seen as the result of trade friction between the U.S. and China, which has led to increased American tariffs on Chinese goods. But it also reflects rising trade within Asia as the region implements various free trade pacts, as well as weakening demand in Western markets for Chinese exports.

Industry groups in Thailand have also expressed increasing concern about an influx of cheap products from China, which they say have greatly hurt sales by domestic producers who are unable to compete.

In what it called an urgent measure, the Thai government imposed a 7% value-added tax on all imported products, a change from the previous rule that only collected taxes on imported products that cost more than 1,500 baht ($44). The policy is only in effect from July until December this year to give the government time to study the issue before a longer-term solution can be applied.

In December, Indonesia issued a regulation to tighten monitoring of more than 3,000 imported goods, including food ingredients, electronics and chemicals. But the regulation was reversed after domestic industry said it hindered the flow of imported materials needed for local production, and the government began considering steep tariff hikes instead.

While smaller manufacturers have suffered the greatest setbacks, big factories are also hurting.

Jany Suhertan, managing director of PT Eksonindo Multi Product Industry, which makes clothing and accessories like backpacks and handbags in West Java, wants the government to raise import duties on finished goods from China but not on raw materials needed to make products in Indonesia.

Nearly half of the materials his company uses are from China.

“I don’t agree with imposing (higher tariffs) on raw products, since the government should protect the supply chain. If it is not secure, it will impact production,” Suhertan said.

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Political criticism and controversy swirls ahead of China video game release

washington —  The release of a Chinese video game touted as the country’s first to meet Triple-A standards, has sparked a flurry of online criticism of the Chinese government.

Video games are given a AAA label when they are backed by big funds, highly developed and distributed by well-known publishers.

The Aug. 20 worldwide release of the Chinese game Black Myth: Wukong has been anticipated since its demo got more than 56 million views on the Chinese video-sharing website Bilibili in 2020.

On YouTube, which is banned in China, the game demo had more than 10 million views.

Developed by China-based Game Science, the game has players take on the role of the Monkey King, a character from the Chinese classic novel Journey to the West, and defeat monsters wreaking havoc on the world.

Although the game has no direct connection to politics, Chinese commenters took to a U.S.–based gaming discussion board ahead of the release to criticize the Chinese government and President Xi Jinping.  

The discussion board on Steam, a Washington state-based online gaming platform, was hit with a slew of comments in Chinese last week that directly and indirectly criticized Chinese authorities and Xi.  

One mocked Xi’s unprecedented third term as leader, saying, “I will continue to be Jade Emperor in Black Myth: Wukong. Raise your hands if you oppose it.”

Most critical posts ranted against the Chinese government, in ways unrelated to the game.

“Overthrow the Communist Party of China and establish a democratic constitutional system where everyone has a vote,” read what appeared to be the first critical comment.  

“Thank you to the party, thank you to our great chief accelerator, Xi Jinping,” another comment reads, mocking Xi’s policies as accelerating China’s economic decline.

Another post listed the timeline of the weeks-long 1989 Tiananmen Square pro-democracy protests and the subsequent violent crackdown that occurred when Chinese troops used lethal force against student-led demonstrators, killing hundreds, perhaps thousands.

Such critical comments of China’s government and leaders are not allowed on China’s internet, where an army of censors frequently scrubs websites and discussion boards of comments that do not follow the Chinese Communist Party’s line.  

Observers were surprised to find by the afternoon of Aug. 16, many of the critical posts on Steam’s U.S. discussion board had similarly been removed.  

Li Ying, a Chinese social media influencer and government critic known online as Teacher Li, posted his opposition to the removal on Aug. 14 on X with screenshots of the original posts.

“Steam is inherently a free platform, with a wide variety of games here, and players are free to express any opinions and opinions about the game,” he wrote on X.

Steam’s China-based website does not have a discussion board, and the U.S.-based discussion board is only available to users outside China. Those inside China need to use a Virtual Private Network, or VPN, which helps users bypass controls to access internet content outside the country that is blocked.

VOA reached out to Steam seeking comment about why the posts were deleted but did not receive a reply. Steam’s discussion board rules do not explicitly prohibit political posts but say that users are not allowed to post “disrespectful” content and to avoid posting content unrelated to the topic.

While the game is not directly connected to the Chinese government, it did receive some official help and praise. The city government of Hangzhou, where Game Science is located, gave the game a grant in 2022. State media in the province, Zhejiang, described the game as “one of the most important explorers in the history of AAA games in China – an explorer that deserves applause and encouragement.”

It’s not the first time Black Myth: Wukong has stirred up some controversy.

The game’s developers have been accused of making lewd and sexist remarks.

Feng Ji, the founder and CEO of Game Science, in a Weibo post last year lamenting the difficulties in development, used words with erotic connotations and compared his desire for expanding development to oral sex.

Yang Qi, the game’s artistic director, remarked as early as 2013 on Weibo that they would not pander to female players in the game’s production.

“I don’t need the reverse drive of female players. I don’t take care of those lewd insects who come to pick up girls; some things are made for pure men,” he wrote.

In response, a female influencer posted on the gender-focused WeChat account Orange Umbrella, urging Game Science to respect female gamers.

“As a fellow player, I know how much hard work and dedication it takes to make a game, and Black Myth: Wukong’s dedication and seriousness in the production are commendable,” she wrote. “However, don’t let the backward gender consciousness push players who are also full of expectations for the game in the opposite direction more and more.”

When Western media, including IGN, one of the most influential U.S. online news sites for video games, reported last year on the controversial comments, nationalist Chinese commenters called the coverage an attempt to impose western values and put down China’s gaming industry.

“Judging the Chinese game with the politically correct stance of the West is really biased for the media,” a review article reads. The article said whether the developers’ remarks constituted sexism “depends on the perspective.”

On Weibo, one commenter called IGN a “clown” and wrote, “In order to suppress the rise of Chinese games, the gender card is unsurprisingly played again.”

Despite the controversies, gaming industry experts expect Black Myth: Wukong to be a big hit.

Daniel Camilo, a game industry consultant based in southern China’s Shenzhen city, noted to VOA that sexism in the gaming industry is not new and has little impact on commercial success.

“Hardcore gamers and fans that actively discuss these issues and are aware of them usually represent a very small [loud] minority online that accounts for a small residual amount of those who actually buy games,” he said.

The game has already received high praise from reviewers in China and abroad.

IGN gave the game an 8 on a scale of 1 to 10 on Aug. 16, calling it a “great action game with great fights and exciting and powerful opponents, albeit with a few bugs.”

The Chinese version of IGN gave the game a perfect score of 10, writing, “This is a truly competitive domestic game in the global market, and I believe it will be a strong contender for this year’s Game of the Year.”

Camilo noted the high quality of the homegrown game has given Chinese players something to be proud of that might even help improve China’s international image.

“Black Myth will change perceptions people have regarding Chinese games and, to some extent, China and its cultural output and soft power really,” he said.

Adrianna Zhang contributed to this report.

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How will Japan’s new leader tackle Indo-Pacific security threats?

tokyo — During his term, Prime Minister Fumio Kishida has transformed Japan’s defense posture amid growing threats from China, Russia and North Korea.

After nearly three years in power, however, Kishida is set to leave office, having announced earlier this month that he would not run in September’s election to lead his ruling Liberal Democratic Party, amid low approval ratings and corruption allegations within the LDP. 

At question is whether his successor will build on that legacy or take Japan in a new direction. Regardless, Kishida said he would support the new leader.

War anniversary

Kishida marked the 79th anniversary of his country’s defeat in World War II on Thursday, leading a solemn ceremony in Tokyo alongside Japanese Emperor Naruhito and Empress Masako.

Speaking to delegates in what will likely be one of his last major public events, Kishida reiterated Japan’s long-held position on its devastating 1945 defeat.

“We must never again repeat the devastation of war. Although 79 years have now passed, no matter how time flows, we will remain committed to this resolute pledge, passing it down across generations,” Kishida said.

But his speech also reflected Japan’s changing role on the global stage.

“Japan will do its utmost to resolve the various challenges facing the world as it works to maintain and strengthen the free and open international order based on the rule of law while placing human dignity at the very center. In this way, we will carve out the future of our nation,” he added.

Global challenges

Japan lies at the intersection of several of those global challenges, and Kishida’s successor will likely continue his approach to defense and security, said Tomohiko Taniguchi, an adviser to the late former Prime Minister Shinzo Abe and now a special adviser at Fujitsu Future Studies Center.

“The scope of options for Japan is indeed narrow because of the troubling neighborhood that Japan finds itself in,” Taniguchi told VOA.

“Russia, North Korea and China — three of the nuclear-powered [armed] nations — none of which has exercised anything akin to open democracy. And all three of those countries are all fostering hostility and hate, intentionally and institutionally, towards Japan and the U.S.-Japan alliance,” he said.

Ukraine ties

Shortly after Russia’s February 2022 invasion of Ukraine, Kishida warned that “Ukraine today may be East Asia tomorrow,” a statement that appeared to resonate with many regional allies.

The Japanese leader forged close ties with Kyiv, visiting the town of Bucha in 2023, where Russian troops are alleged to have committed war crimes, including mass killings and rape. Moscow denies the charges, despite widespread evidence.

Kishida then invited Ukrainian President Volodymyr Zelenskyy to attend the 2023 G7 summit in Hiroshima.

Under Kishida’s leadership, Japanese lawmakers approved a doubling of defense spending by 2027. He forged closer alliances with regional allies, and in July, successfully negotiated an upgrade of the United States’ military command in Japan.

South Korea

Over the past two years, Japan’s Kishida and South Korean President Yoon Suk Yeol overcame historical grievances to forge a close alliance. 

In a joint statement issued Sunday, the United States, Japan and South Korea reaffirmed their pledge made a year ago at a historic trilateral summit at Camp David.

“We stand by our commitment to consult on regional challenges, provocations and threats affecting our collective interests and security,” the statement said.

But uncertainties remain, said analyst Taniguchi.

“There is no assurance whatsoever that the improved South Korea-Japan relationship is going to continue as it is. President Yoon has passed the midpoint of his term. The rest of his term is going to be increasingly a lame-duck administration. The opposition parties are sniffing blood already — and the easiest target for the opposition party is to say that the incumbent administration is too weak vis-a-vis Japan,” Taniguchi told VOA.

Likely successor?

Kishida has no obvious successor. Several LDP lawmakers, including numerous government ministers, are expected to put themselves forward for the Sept. 27 vote for the party presidency. 

“There are some (candidates) who have shown uneasiness… as if Japan was a puppet of the Big Brother of the United States,” Taniguchi said.

Japan’s next prime minister will also have to win over the Japanese public and rebuild trust that has been eroded by a recent scandal over political funds.

“The public supports in principle are boosting Japan’s defenses and the defense budget hikes, but they are actually unwilling to pay higher personal taxes in order to do so,” said Yee Kuang Heng, a professor of international relations at the University of Tokyo. 

He added that the Japanese public now largely accepts the need for a stronger defense capability, “but nevertheless remains quite cautious about a more aggressive military posture.”

Global reaction

The United States’ ambassador to Japan, Rahm Emanuel, wrote on X that Kishida had “helped build a latticework of security alliances and partnerships across the Indo-Pacific region that will stand the test of time.”

Beijing, meanwhile, said it would work to build a constructive and stable China-Japan relationship with Kishida’s successor.

The next prime minister will require staying power, Taniguchi said, “because the next five, six or seven years is going to be crucial for this ongoing long game between China and Japan. And nothing can be achievable for a prime minister who stays in office only for one or two years.” 

He added, “So, the next prime minister has got to come up with a good plan with which he or she could stay in office, manage difficult tasks, strengthen Japan’s alliance networks, and beef up Japan’s defense spending.”

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Myanmar fighting blocks key trade route with China, impacting economy

Bangkok — Ethnic and resistance forces in Myanmar have completely blocked a key trade route to China, halting cross-border commerce and further damaging Myanmar’s already struggling economy.

The Mandalay-Lashio-Muse Road is considered the most strategically important road in the country’s northern Shan State.

Formerly known as the “Burma Road,” locals commonly call it the “pearl necklace,” as it connects Myanmar’s second largest city of Mandalay with the Chinese border. The string of pearls of trade towns already captured by rebel forces include Nawnghkio, Kyaukme, Lashio, Hsenwi, Kutkai and Muse near China’s southern border of Yunan province.

Lway Yay Oo, spokeswoman for the Ta’ang National Liberation Army, or TNLA, told VOA that right now “there are battles all along the trade route.” That has increasingly been the case, she said, since the second phase of operation 1027 began several weeks ago.

The TNLA is part of the “Three Brotherhood Alliance,” along with the Arakan Army, AA and the Myanmar National Democratic Alliance Army, or MNDAA.

The first phase of the 1027 rebel offensive, which is named after the date it began, began on October 27, 2023.

The recent capture of several key towns along the trade route in a relatively short span of time has been widely seen as a potential turning point in the resistance as rebels look to cement control and further loosen the grip of junta forces the region.

The military government isn’t giving in easily, however, with intense battles along the route making trade nearly impossible.

“The TNLA and joint forces control the entire border trade route with the cities of Kutkai, Lashio, Kyaukme and Hsipaw, except for Muse,” Lway Yay Oo added. “Although we are prepared to keep businesses operating, we’ve had to stop border trade due to fierce fighting.”

Myanmar’s trade crisis deepens

The ongoing conflict and capture of key trading towns is already having an impact.

“Myanmar’s trade sector depends mostly on border trade,” said one Yangon-based businessman, who requested anonymity due to security reasons during a phone interview with VOA. “Air trade is very expensive now, and maritime trade takes a long time, so we must rely on border trade routes.”

With main trade routes closed, businesses are looking to find alternate routes.

“Trade flows are slower than they should be, and we are spending more on transportation, leading to further losses,” the man said. There is also an impact on consumers as the ripple effect of higher transportation costs, currency fluctuations and slower trade spreads to the general population.

“When these things happen, consumers also suffer,” he said, adding that right now “with demand so low, our revenue has dropped by about 50%.”

Earlier in June, the World Bank downgraded Myanmar’s economic growth forecast to just 1% for the 2024-2025 fiscal year, citing the intensifying conflict, labor shortages and a depreciating currency as key challenges. And that was just as the second phase of operation 1027 was beginning.

Impacting the junta

According to the Ministry of Commerce’s statistics, the border trade value between Myanmar and China totaled US$416.867 million in the first two months of the current financial year 2024-2025, which began on April 1.

It is a significant decline from the $640.43 million recorded during the same period last year, and a decrease of $223.564 million.

So far, for its part, Myanmar’s military rulers are playing down the impact the conflict is having.

“Despite the challenges posed by recent conflicts, we continue to facilitate trade with our neighboring countries, especially China,” a representative from Myanmar’s Ministry of Commerce said in June, according to state media. The ministry has not commented on the impact fighting has had on the economy since then.

Opposition forces disagree and say the success of the resistance has significantly weakened the junta’s ability to manage the economy, including trade.

“The revolutionary forces have grown stronger militarily and now control more territory,” said Min Zayar Oo, the NUG Deputy Minister of Planning, Finance, and Investment, in an interview with VOA.

Min Zayar Oo added that part of this is because of the junta’s mismanagement.

“Stability and clear policy are essential for business, but the military council has failed to provide this,” he said.

Commodity prices are soaring due to inflation and recent efforts by the junta, such as printing new currency notes, have only worsened the economic situation, he adds.

“Cross-border trade routes are disrupted, foreign currency is scarce, and the junta is struggling to provide basic services. The economic front, like the military front, is already collapsing,” he said.

The economic downturn is also impacting military funding, former army Major Naung Yoe told VOA in a telephone interview.

“No matter how much the junta increases the military spending budget, if the country doesn’t have foreign currency, the military spending will also be affected,” he said.

Border trade stalls, Kyat at record low

As fighting continues and trade stalls and the value of Myanmar’s currency the Kyat plummets, many business owners are hoping a resumption of stability will come soon.

“Every day that the fighting continues, our businesses suffer,” one medium-sized entrepreneur based in Yangon told VOA, who requested anonymity for security reasons. “We rely on cross-border trade, and with the current situation, it feels as though we have been cut off from the rest of the world.”

In late June, the Kyat hit a record low in foreign exchange markets, exacerbating the financial crisis faced by many in the country.

“We are struggling to keep our operations afloat,” another entrepreneur noted. “The depreciation of the kyat is making imports prohibitively expensive, and we cannot raise prices without losing customers.”

As the conflict rages on, the future of Myanmar’s economy remains uncertain, with many calling for an urgent resolution to restore stability and revive trade. “We need peace to rebuild our businesses and our country,” the Yangon based entrepreneur added. “Without it, we are all at risk.”

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