Asia Pacific News
LAST UPDATE: July 12, 2025
US and China have ‘positive’ meeting at ASEAN foreign minister talks
US Secretary of State Marco Rubio met China’s Wang Yi in Kuala Lumpur during the ASEAN foreign ministers’ meetings (July 11, 2025). Rubio described it as a “very constructive and positive meeting” but not a negotiation; both indicated potential future cooperation and Rubio expressed optimism about a meeting between Presidents Trump and Xi, though no date was set.
Insight
The face‑to‑face meeting signals a thaw in US‑China diplomatic tensions, particularly by leveraging regional forums like ASEAN. Rubio’s public framing suggests a calculated effort to reassure allies while keeping door open for high‑level engagement, even absent concrete agreements.
Rubio’s 36-Hour Trip to Asia Left U.S. Allies Wanting More
US Secretary of State Rubio’s inaugural Asia visit was abbreviated to just 36 hours. Originally planned across three countries, the trip was cut short so he could return to Washington. He had brief engagements with several Asian nations and focused heavily on trade tensions, but allies reacted with frustration over mixed signals and limited engagement.
Insight
The truncated agenda and strong focus on trade reflect the US administration’s priorities, possibly at the expense of deeper diplomatic ties. The dissatisfaction among regional allies underscores a credibility challenge for US foreign policy in Asia.
Thaksin Joins Thai Ministers in Fine-tuning Response to Trump Tariff Threat
Thaksin Shinawatra, long-time influential figure in Thai politics, is stepping into a more active role alongside ministers to coordinate Thailand’s response to a potential 36% US tariff on its exports, as threatened by President Trump.
Insight
Leveraging Thaksin’s political influence signals Thailand’s recognition of substantial economic risk and desire for a unified, high-profile domestic response. It emphasizes how trade policy now intersects with political factionalism.
Sri Lanka promises structural reforms, financial viability of SOEs to IMF
The Sri Lankan government told the IMF it will advance structural reforms aimed at improving financial viability of state-owned enterprises. This commitment is part of ongoing engagement with the IMF under its reform program.
Insight
Strengthening SOEs is key to Sri Lanka’s broader fiscal consolidation and debt sustainability objectives. It shows continued commitment to IMF conditionality, which could support improved investor confidence and external financing.
India’s Foreign Minister to Make First China Visit in Five Years
India’s External Affairs Minister S. Jaishankar is scheduled to visit China—his first in over five years—for bilateral talks with counterpart Wang Yi in Beijing, followed by participation in the Shanghai Cooperation Organisation foreign ministers’ council in Tianjin from July 14‑15.
Insight
The separate bilateral visit, apart from the SCO forum, signals deliberate efforts by both countries to manage strained ties following border clashes in 2020. It underscores a cautious reopening of diplomatic dialogue.
After 10 years, AIIB welcomes new leadership – and fresh US challenges
The Asian Infrastructure Investment Bank (AIIB), founded a decade ago, is about to begin a new chapter with the election of Zou Jiayi—former Chinese finance vice‑minister—as the next president, succeeding founding president Jin Liqun. Her term starts January 16, 2026. The bank faces increased scrutiny amid larger geopolitical and US-originated skepticism.
Insight
Zou’s anti‑corruption background and high-level Chinese ties may bolster internal governance credibility. Yet the AIIB’s trajectory now must balance China’s influence with external geopolitical pressures, especially from the US, as it seeks global multilateral legitimacy.
Asian Investors Lead Diversification Out of U.S. Assets into Eurozone — Interview
According to HSBC AM Global CIO Xavier Baraton, Asian investors are starting to diversify their allocations away from U.S. assets toward Europe. Genuine investor interest began even before U.S. tariff policy announcements.
Insight
The trend reflects growing hesitancy from Asian investors about U.S. overexposure, opting instead to rebalance toward European markets. This preemptive shift hints at evolving global portfolio strategies amid geopolitical volatility.
