Japan-US trade talks down to the wire as deadline looms | East Asia Tonight (Jul 17)

Japan-US trade talks down to the wire as deadline looms | East Asia Tonight (Jul 17)

is East Asia Tonight. Hello and good evening. I’m Shahid Oman. Tonight’s top stories from East Asia. Japan’s exports fall for second straight month with no US trade deal in sight. Talks on an agreement come down to the wire with Tokyo trying to secure a deal before an August deadline. Taiwan ramps up its security readiness, incorporating an air raid drill into its largest annual military exercise and a not to President Li’s increasingly hotline approach to China. South Korea Supreme Court finalizes the acquitt of Samsung electronics chairman Lee Jay Young, confirming the legality of a merger that helps secure his succession at the family control conglomerate. A $47 billion takeover bid for the 7-Eleven convenience store chain collapses. Canada’s Kushtar withdrawing its offer, accusing the Japanese owner of being uncooperative. [Music] Ahead on East Asia Tonight, Taiwan is actively building up its space industry credentials in a crowded field. Does the island have what it needs to take its ambitions forward? And we look at how some Hong Kong residents are taking it upon themselves to innovate and keep the interest going for a folk art known as paper cutting. [Music] Japan is under increasing pressure to lock in a favorable tariff deal with the US as the first of August negotiation deadline approaches. Tokyo’s top trade negotiator Rios Akazawa and US commerce secretary Howard Lutnik both restated their positions on tariffs in a 45minute phone call today but offered no clear signals on the future course of negotiations. Prior to that call, American leader Donald Trump said Japan could soon be subject to a sweeping 25% tariff and that there will unlikely be any policy change. Japan, despite being a key US ally in Asia, has made little progress in persuading the US to lower its tariffs, but Tokyo plans to keep discussions with Washington going. Now, concern over whether a deal can be struck is growing, especially with the latest trade data. Overall outbound shipments in June declined 0.5% on year with exports to the US down 11.4% steeper than May’s 11.1% decline. Auto experts plunged more than 25%. Now the auto industry is critical to Japan’s economy with roughly 8% of jobs tied to it. Media reports say US Treasury Secretary Scott Bessend is set to meet Prime Minister Shigeru Ishiba in Tokyo when he travels to the country for the world expo. Now for more we are joined by Vivec Vadia, partner at Frost and Salvin. Mr. Vadia, uh Japan seems to be caught between a rock and a hard place ahead of the upcoming elections. uh you know facing pressure uh from US terror threats while also trying to avoid appearing weak or appeasing. So how do you see this playing out politically and economically? Uh see as far as Japan is concerned their entire economy was structured and built over decades painstakingly uh on a export base and that is uh the entire foundation of the economy. So suddenly when uh the tariff rules are changing, it is extremely difficult for Japan to adjust to the new reality and make uh their markets open for any kind of exports because the entire philosophy on which the economy is built is export orientation. And uh therefore it is not uh absolutely not easy at all for Japan to adjust to this new reality where there would be a fair uh uh transfer of goods back and forth and that that definitely is going to be a challenge as far as Japan is concerned. You know the US has long criticized the Japanese auto market as being close to American manufacturers. But what’s the reality behind this? How much of it is really a market fit issue versus a trade barrier problem? Uh see the market as far as the products are concerned in both uh the countries are structured dramatically differently. Uh if you go to um Japan the cars are much smaller. They are called K cars. There is a significant portion of cars which are less than 1,000 cc or one liter cars. And as a result uh the structure of the entire industry itself is quite dramatically different. Uh whereas what has happened in US is uh the cars are larger. They sell a lot of pickup trucks and over a period of decades uh US market uh is targeted by Japan and Japanese uh automakers have created products designed and developed products that are suitable for uh US uh markets and because of this uh Japan is able to target the US market very easily whereas vice versa is not really possible. So the structure of the market is dramatically different. So it is not just the trade barrier issue. It is it is the completely uh issue of market segmentation and the type of product that is available in the domestic markets in either countries. So do you think that this nuance is lost in the current high level US trade negotiations? Well, a lot of nuances are lost in trade negotiations. So I think the trade negotiations are happening with a very extremely cookie cutter approach which which we have never seen uh happening before. Uh the trade negotiations FTA negotiations that we track at Frosten 11 are usually uh where uh uh you know sensitivities of different countries are taken on board. There are some go no go areas and there are some areas where both these uh countries try to trade with each other. Whereas both countries understand and appreciate that there are some areas where the other country may not be open for any kind of exports or imports and that is uh kind of assured uh by the other country. But uh in this type of negotiation we are trying to arrive at a number uh across all the commodities which is unprecedented and it is very hard for us to wrap our heads around how these negotiations are uh going to benefit either of the countries. As we saw, Japanese uh auto exports to the US tumbled more than a quarter in June. Uh with so many jobs in Japan tied to the auto industry, to what extent could the potential US tariffs on Japanese vehicles trigger uh broader economic or labor unrest? What kind of ripple effects can we expect to see? Uh so in short term of course there will be uh effects on Japanese manufacturer but you have to understand that uh Japan does not export all its products from Japan. uh they have a very well diversified uh supply chain where the plants are located not just in Japan but they are located in US they are located in Mexico, Canada, Europe, India, Asia Pacific almost everywhere and as a result uh you can’t really think of it as a single dimension problem where uh tariffs are on Japan and therefore Japan will lose out. No, they would change uh their production configuration. they will start manufacturing in overseas plants and try to retain their volume. So yes, there would be some impact on uh the production that is happening in Japan directly. However, it is unlikely to be the doom and gloom that most of the pundits are predicting. But but do you see any room for compromise or strategic realignment uh between American and Japanese automakers that could perhaps deescalate tensions and avoid a tariff standoff between both sides? I would say that uh automotive or cars are only one part of the entire negotiation piece. So even if there is a negotiation agreement that is reached between uh the car makers uh the entire problem is still uh not really addressed because uh the entire trade negotiation is not just about automotive or cars. It is it encompasses everything. So uh I’m not sure whether uh any kind of uh deescalation in uh cars will help them to solve the challenge uh which is of the entire trade basket. All right Mr. Vadia thank you so much for sharing your perspectives with us. Uh Mr. Vivec Vadia there partner at Frost and Sullivan. Taiwan is stepping up its civil defense as military tensions with China continue to rise. For the first time, an air raid drill has been built into the island’s largest annual military exercise. CNA’s Victoria Jen has more. It’s not often you see a Taipei street this quiet in the middle of the day. There is no cars or scooters moving inside, but that’s exactly what happened this afternoon when the city came to a sudden standstill. At 1:30 p.m., airray sirens ran out and within minutes, the roads were cleared. It was part of a civil defense drill. The first time Taiwan has included in its annual Hangu military exercise. For 30 minutes, everyone was told to drop everything that they were doing, get off the road, and take shelter. Drivers pulled over. Buses let passengers off. People walking outside were guided into nearby buildings. While metro stations didn’t shut down, passengers were asked to leave the platforms and follow safety instructions. Officials say that the drill is a response to what they called growing military threats from China. As much as it was about stress testing the system, Thursday’s exercise was about drilling the idea of civilian readiness into residents. And it comes as President William Lee takes a much more hardline proependence approach towards China. He has called China a foreign hostile force and repeatedly made references in official speeches that imply Taiwan sovereignty. China claims Taiwan as part of its territory and has said it will never commit to renouncing the use of force over the South Road Island. Victoria Jen, CNN, Taipei. Japan has condemned the sentencing of its resident in China, describing it as extremely regressible. A Chinese court yesterday sentenced an employee of a major Japanese drug maker to three and a half years in prison on the grounds of what Beijing deems as espionage. The man was a staff at Japanese pharmaceutical company Astellas. He had been detained by Beijing since March 2023 and was formally arrested about a year ago. Local media reports five Japanese residents, including the Astella staff, are currently detained in China. The sentence threatens to further strain already tense bilateral relations. The incident is weighing on Japanese firms in China. Firms share that they find it difficult to operate their businesses without knowing what the illegal acts are. The Japanese embassy in Beijing has been providing safety handbooks to visitors to China and urging them to travel with caution. A South Korea Supreme Court has upheld the acquitt of Samsung Electronics Executive Chairman Lie Jay Yong in a controversial merger case dating back to 2015. The latest ruling backs two lower court decisions that cleared him of accounting fraud and stock manipulation related to an 8 billion US merger in 2015. The charges had been related to the two Samsung affiliates, Chell Industries and Samsung CNT in 2015. Prosecutors alleged that the merger was designed to cement Mr. Lee’s control of the tech giant at minimal cost. Samsung’s lawyers said they were sincerely grateful to the court for its decision, adding that the ruling confirmed that the merger was legal. The merger was seen as crucial to Lee’s succession as heir of the family controlled group after his father Lee Kunhi suffered a heart attack. South Korean President Lie Jay Myang has ordered the setup of a new team to investigate the 2022 Halloween crowd crush that killed more than 150 people. The president’s order comes after he met berieved families of recent disasters. Mr. Lee told families he would consider granting the investigative committee special powers to overcome their limited authority. A spokesperson also said officials will be drawing up a detailed plan. Coming up on East Asia Tonight, Taiwanese chipmaking giant TSMC turns in a sterling report card for its second quarter results. And later, we dig deeper into what could have gone wrong in Canada’s Alimantas Kushtad’s bit to take over one of Japan’s most beloved brands. [Music] And it’s time now for business news with Rona Lim Roland. Japanese firms are on a record-breaking M&A uh spree. You heard right. Um Japanese firms defying the gloom the rest of the global M&A market, but not on their home turf. We’ll get to that soon. But first, some earnings news. the world’s largest contract chip maker. Taiwan’s TSMC reporting another quarter of stellar growth. This on the back of a global AI spending spree as demand for its highend artificial intelligence chips continue to outstrip production capacity. For the three months ended June, TSMC logged three and a half 13.5 billion in net profit and that is more than 60% higher than the same period last year. revenue for the period also 39% to more than $ 32 billion on year. Both figures beating market expectations. The results comes as Nvidia announced it will resume sales of its H20 chip to China amid a day in trade between Washington and Beijing. But last month, TSMC said that US tariffs may have some effect on demand due to higher prices. The Taiwanese currency’s rally against the greenback has also tempered its growth in US dollar terms. The chipmaker says that every percent increase in the Taiwan dollar reduces its gross margin by 0.4%. TSMC’s stock ending the day flat before the results were out, but the Taiwan weighted index was up 0.3%. TSMC’s record earnings helped chip makers in the region pair of off steep losses. Adventest in Tokyo down 0.8% Skhinix in Soul slumping nearly 9%. Meanwhile though, Samsung electronics ending the day up by more than 3% after the Supreme Court declared that its executive chairman Jay Lee of all fraud and stock manipulation charges marking a major legal victory for the billionaire. Gains in the heavyweights lifting the benchmark Cosby index helping it to close a tad in the green after falling by as much as 1% during the session. The Japanese yen is weaker against the green bag by 6/10 of 1% 14875 to the US dollar. Investors also focus on a potential power shift in the upper house elections this weekend. The nicay in Japan closing out the day 6/10 of 1% higher as investors assessed the country’s latest trade data that showed that exports dropping for a second straight month. A Japanese trading company Mitsubishi says it’ll expand its salmon farming by acquiring additional businesses in Norway and Canada. Now faced with volatile fossil fuel markets and in search of stable revenue streams, Mitsubishi and its rivals have been diversifying into the food business where demand is set to grow alongside a rising world population. Now, Mitsubishi acquired three companies with holdings in Norway and Canada, which would bring its annual salmon production up to 280,000 tons by fiscal 2027. And that’s up from its current 200,000 tons. Mitsubishi first entered the salmon market in 2011 in Chile. Now, salmon is one of the most popular sushi items in Japan, but the country imports the bulk of its supply from countries such as Norway and Chile. The country also plans to raise the share of locally sourced seafood to 94% from the current 54% by 2033. Japanese companies are on a tear with merges and acquisitions with deals in the first half of this year already toting the whole of last year’s. That’s with corporate governance reforms gathering momentum and putting pressure on boards to make cash work for them. The number of deals total around $140 billion for January to June. They’re not just completing those on the home ground, but fishing for such deals abroad with around half of the transactions involving taking over foreign competitors. Now, one lawyer in the field says there’s more appetite for overseas acquisitions with the shrinking domestic market crimping growth prospects locally, though uncertainty over US tariffs is holding some back. And while Japan carries on a scorching streak of global M&As, it appears not so willing to foreign takeovers. Canadian retailer Alimantasan Kushtar has officially abandoned its record multi-billion dollar buyout offer for 7-Eleven parent company 7i Holdings. This brings an end to its year-long campaign to negotiate terms for a deal which what could have been the largest foreign takeover of a Japanese company. the Circle K owner citing a lack of constructive engagement by the Japanese retailer for the move. It added that 7 and I had engaged in calculated campaign of obfuscation as well as delays to the great detriment of the company and its stakeholders. Now Kushtar says their commitment to not pursuing a hostile takeover remains. 7 and I countered circle case accusations saying it was disappointed by the decision and disagreed with their numerous mischaracterizations. It also pointed at significant changes in the global economy, exchange rates and financing markets from the time when the proposal was first made which could have affected the outcome. 7 and I stocks closed down 9% in Tokyo. shares were up more than 25% since Kushtar’s interest became public 11 months ago. And Roland, you’ve been following the twists and turns of this deal and this was, you know, supposed to be a blockbuster deal. What went wrong here? Well, analysts say that Kushtar tried the soft approach. It didn’t work. uh despite offering a massive 47% premium on its valuations and also agreeing to divest its uh US assets in a public listing in the US well they never actually got any meaningful track with the 7 and I management themselves instead Kushta as I’ve said that they were met with obfuscation as well as delays what really could have sealed the deal would have been some analysts say constructive engagement because Even after they signed the non-disclosure agreement and also raised their offer they came in with an offer wasn’t enough. They sweetened the offer but still uh civil and I board was never really on board. So some analysts are saying that Kushta should have gone hostile instead. So the soft approach backfired. They should have turned hostile instead as you said. So could Kushta have done anything else that’s different to get this deal across the line? Absolutely. I mean this would have been a change in mindset. I mean they needed to go in harder faster and the deal really shows that Japan is still very much resistant to any foreign company taking over a Japanese corporate. Uh remember the the Canadian convenience store owner had uh sweetened the deal 47% they were offering 2,600 yen per share. That’s a 47% increase over the unaffected stock value that would have valued 7 and I between 45 to 46 billion. Um but you know if Kushtar had taken that hostile bid situation that means they would have taken their tender offer and presented it to all existing shareholders or uh rallied support from activist shareholders. This would have put pressure on 7 and I’s management but they didn’t do that because possibly they were afraid of spooking uh the local investors as well as the Japanese regulators. They didn’t do this. So perhaps that’s the reason why the deal failed. And taking a step back roand, what does this episode really tell us about the broader climate for foreign M&As in Japan? Are we looking at a setback here? Well, it’s definitely a reality check. I mean uh on the one hand Kushtar did make an impression. I mean seven and I’s management were forced to appoint outsider CEO. It was also forced to come up with a 13.5 billion dollar share buyback scheme for it shareholders and on top of which possibly divesting all its US assets in North America in a public listing. So it did make some impact but at the end of the day uh you know Japan’s corporates are still holding on to the old power structures. What I mean by this is that it relied on a white knight. So it uh had a counter offer by uh the founding itto family the founder of the 7 and I group as well as teaming up with a trading house. they came up with a counter offer in order to keep seven and I in Japanese hands. So that was one and then the shareholders themselves, Japanese shareholders themselves have to actually uh they prioritize legacy and control over shareholder value and you know market logic. So that didn’t make sense to a lot of people. I mean we’re offering you more money. Why aren’t you accepting it? And finally, they also didn’t uh you know accept that poison pill strategy at which they would have actually sold their shares to existing shareholders at a bigger discount. That would have meant it more expensive for Kushtar to have sealed the deal. So all these factors into play means that the moral of the story for foreign companies wanting to come into Japan is that do it hard and fast or don’t do it at all. All right, appreciate that, Roland. Thank you very much for speaking with us. Coming up on East Asia Tonight, we’re going for a short break now. A private Taiwanese company failed in a recent attempt to send a rocket into outer space. What impact will this setback have on the island’s ambitions amid an intensifying global space race? Now, we will be speaking with an expert for more insights. [Music] This is East Asia Tonight and here are the headlines we’re following. Japan under increasing pressure to lock in a favorable tariff deal with the US as the 1st of August negotiation deadline approaches. No progress after a 45minute phone call between top trade negotiators from both sides. Taiwan stepping up its civil defense as military tensions with China continue to rise. For the first time, an air raid drills has been built into the island’s largest annual military exercise. And the Supreme Court in South Korea upholds the acquitt of Samsung Electronics Chairman Eli Jay Yong, backing earlier decisions that clear him of accounting fraud and stock manipulation in a controversial merger case dating back to 2015. A Taiwan space ambition suffered a recent setback after a launch by a Taiwanese private rocket firm failed to reach outer space last Saturday. A Tespace terminated the flight of one of its rockets shortly after liftoff from Japan’s Hokkaido spaceport. The firm was aiming for the inaugural flight of its 12meter hybrid filled rocket, the VP01 to reach some 100 kilometers above the Earth’s surface. But its trajectory turned wobbly soon after takeoff before going into freefall. If it had succeeded, Teespace would have been the first foreign company to perform a launch on Japanese soil. Tespace had tried to launch a rocket in Australia back in 2021, but the attempt was abandoned after three failures, and Taiwan has been seeking to develop its own space program despite a crowded field that includes China. The island is currently holding its annual Han Kuang military drills and the threat of a Chinese invasion analysts say is also behind Taiwan’s race to space. Now, for more insights, we now speak with Dr. Chuni Lee, director of the Taiwan Studies Program at the University of Nottingham. Uh Dr. Lee, welcome to the program. So Tespace second failed launch uh this time in Japan following the setback in Australia. What do you think this failure mean for Taiwan’s growing space ambitions? Well, in fact that there would be many failures uh before a actual successful launch. That’s all we know. So I don’t take this one as a um catastrophic failure in its sense but it’s it is of course a unfortunate uh failed launch of itself. One thing that we would need to um just notice that it is a a private company to organize this launch. So uh to what extent that the Taiwanese government actually involved in this game behind the scene we don’t know but even so a private company would be able to start to organize and to uh try to launch the first one in Australia although didn’t actually start it and this time in Japan it’s indeed indicates Taiwan has a great ambitions to join this very crowded space um campaign if you like. So as you said, Tespace is a key private player in Taiwan space industry. So how might this affect investor confidence and government support? I would think that actually after this uh failure uh failed launch in that sense the government would probably um invest even more or provide even more the human talent and also the capital into this uh space or if you like the sec satellites uh designing because Taiwan knows that it needs a lot uh capital and human talents for the space program to be actually successful And one thing I also wanted to address is I don’t think really Taiwan wants to compete with any space hedgemonic power. Taiwan knows the capacity that Taiwan has. So Taiwan may wanted to achieve a smart space program which is getting into the niche of the space ecosystem. Okay. So on that note, if we were to take a look at Taiwan’s national space plan, it has big goals uh including a plan to launch six domestically developed satellites starting in 2026. So what’s behind these very specific plans? I would suggest that it is from the government’s intention that wanted to really into enter the space um I wouldn’t say comp camp compend but enter the space uh in a sense of in into this global uh competition but also knows that Taiwan may not be able to rest up with other already existence powers there. So six satellites it sounds really big uh ambitions but actually Taiwan has been working on for this for a long time. So we will see if the ambitions will be fulfilled but to my knowledge there’s a lot back in the scene that the government and also the academic institution like Tesa has been working really hard to achieve such a goal for this specific mission. Dr. ly um the rocket company used a Japanese launchpad. H how does this reflect growing space cooperation between Taiwan and Japan and what sort of implications will this possibly have on cross trade relations? In many ways, Taiwan will have to uh cooperate with international partners into the space um ecosystem. I use this word still. So Japan is the closest alliance that uh Taiwan will be able to work with and this is what we have seen and Taiwan also has the intention to reach out to other international partners not only Japan. So of course you are right that it’s really touch the red bottom of China because no matter if on earth or in the space China is trying to cut every alliance that Taiwan would be able to have and not to mention in in the space uh China actually is now the hgemonic power counter the US. So I think that it would create even more tension cross trade in the space. What message then do you think this collaboration between uh Taiwan and Japan is sending to Beijing? Sending to Beijing that Taiwan has reached out to multilateral uh international partner not just in the trade on earth but also in the future technology for instances in space. So I would say that um China or Chinese government now has been aware that well no matter how much efforts that they would wanted to cut off Taiwan um but Taiwan still managed to work with other international partners um in all kinds of possibility. it might again um make the Chinese government be more stressful or being more aware of Taiwan’s potential international developments. Uh we look at Taiwan satellite program Dr. Lee has been described as aiming for communications and earth observation. uh could you explain to us what that means in practical terms for Taiwan’s national security and also its economy in any satellines um design or launch actually it’s a dual usage so you are very right that Taiwan is focusing on the um civil usage of the telecommunication or location GPS which is what Taiwan needs but in s in a sense that it is also about the national security and one again important point we can’t forget is Taiwan is not included in the uh Starlinks coverage. So what Taiwan can do or Taiwan would like to try to make an effort to is to create or at least to try to align work together with our other partners to have its own space in the space in a sense we’ll be able to not just about the national defense but also the civil usage of the telecommunication. All right Dr. Lee appreciate your insights. Thank you very much for speaking with us. Dr. Chun Lee, director of the Taiwan studies program at the University of Nottingham. Chinese linked hackers are increasingly targeting Taiwan semiconductor sector as well as industry analysts in cyber spying programs according to cyber security firm Proof Point. The firm’s researchers say entities that have not previously been targeted are now in the sights of hackers with unreported hacking campaigns taking place between March and June carried out by at least three separate Chinese linked groups. Proof Point did not say whether those attempts were successful. While stealing data through hacking has been a longunning problem, the rise in frequency comes amid export restrictions by the US of high-end computing chips to China. And at a time when the Chinese semiconductor industry seeks to design its own replacements. Experts at Proof Point said it observed 15 to 20 organizations ranging from small businesses to large global enterprises facing attacks. But Proof Point also believes this remains a limited phenomenon. Separately, cyber security firm Team T5 noted the Taiwan chip industry saw an increase in emails tied to a few hacking groups and added that such targets have long been an interest when it comes to Chinese related spying. The Chinese embassy in Washington responding to a Reuters query said cyber attacks are a common threat faced by all countries and that Beijing firmly opposes all forms of hacking. A Cambodia has arrested more than a thousand people in cyber scam raid since early this week. It follows a directive issued by Prime Minister Hun Manet to law enforcement and military personnel warning them to take action against the criminal operations or risk losing their jobs. The Cambodian leader highlighted that the scams are not only threatening security in the region but globally as well. He says foreign criminal groups are also involved. The suspects which included more than 200 Vietnamese were arrested in at least five provinces. Another 270 Indonesians were also detained in Poipet, a border town notorious for cyber scam and gambling operations. Police seized equipment including computers and hundreds of mobile devices. Other suspects include nationals from Cambodia, Thailand, Bangladesh, Myanmar, China, and Taiwan. Now, the crackdown is the latest in a series of mass arrests as the government is being criticized for not doing enough to prevent the spread of online scams. Amnesty International released a report last month accusing authorities of deliberately ignoring human rights abusers, including slavery, human trafficking, and child labor. It adds that these were carried out by Chinese criminal gangs in scamming compounds across the country. Pon Ben has routinely denied such claims. Now, coming up on News Asia tonight, a sticky situation in South Korea. We’ll look at what authorities are doing to address an over supply in rice and why farmers say the solution is not as easy as it sounds. And see how the folk art of paper cutting is re-imagined and preserved. [Music] At least three people are dead and hundreds ordered to evacuate as torrential rain triggered flooding and landslides in central South Korea. And it may not even be over. Authorities warn more extreme weather is forecasted this week. South Korea’s weather agency says southwest Chung Chong province saw some of the heaviest hourly downpours, reaching levels typically seen once in a century. More than 400 mm of rainfall hit Xiaoan city, the highest daily record since 1904. Now, the downpours left a trail of destruction in its wake, inundating roads and uprooting trees. Authorities remain on high alert as rescuers continue to search for survivors swept away by the floods. Police earlier reported one victim was found dead after being trapped inside a submerged vehicle. South Korea last endured record-breaking rains and flooding in 2022 where 11 people were killed. On East Asia tonight, we’ve been covering how Japan’s been enduring a year-long rice shortage. And South Korea on the other hand is facing a problem of having too much rice. It buys huge amounts of rice from its farmers to take excess supply off the market and stabilize prices. The government is encouraging rice farmers to switch to other crops. But farmers say it’s not that simple. CN Leian Ser has the story. From the rice patties of Hennam in the south all the way to the northern plains of Chaon, South Korea’s fertile lands produce an abundance of rice. Chaon County in northern Kowan especially is known for its premium grains. Cultivated using clean water and fresh air in a heavily controlled area. These rice fields lie just south of the demol tri zone, separating the two Koreas, which are still technically at war. Panghan ho started helping out at his Paris farm in 1991 when security measures were even stricter. These days, it’s not crossber tensions that worry farmers. It’s persistently low rise prices due to over supply and sluggish demand. A 5 kg pack costs about 15,0001 or $11 US on average. Farmers here like Mr. Pong say the soil conditions make it challenging and expensive to convert the land for other crops. [Music] From 2021 to 2024, the government purchased 1.2 million tons of rice in response to unstable prices caused by over supply. Government held reserves currently stand at around 850,000 tons. According to official data, some farmers in Hanang County in South Chala province are starting to plant other crops. Farmer Munyok says rice farming earns him about 3,1 or2 US20 per pong, which is about 3.3 square meters. Growing chestnight pumpkins can bring him up to 10 times more if conditions are right. Farmer Kim Jun Hyong switched to beans three years ago as part of a government program launched in 2018 to tackle the rice surplus. He now sets aside half his farmland for beans and gets subsidies amounting to about $730 US a month. But he knows he can’t rely on these forever. South Korea’s farmers know they need to expand the market for their rice. Japan’s recent import of Korean rice for the first time since 1999 has fueled hopes that more countries might be willing to buy their rice. Liuk, CNA, Hen County, Chala Province, South Korea. Some young Hong Kong residents are taking it upon themselves to ensure traditional crafts live on beyond the old master artisans, but the young are doing it their way by applying modern touches to elevate traditional craft. May Wong speaks to one such artist in this third of a four-part series on the survival of traditional crafts in Hong Kong. Sketching a Chinese character and cutting it out with a paper cutter seems like an easy task for 34 year old Nick Chao. He’s adapt at paper cutting because of his professional background. Paper cutting is a folk art. So, it is something that you’re supposed to learn at home um through your mother or through your grandmother. Uh unfortunately they didn’t pass down this skill to me. It was something that I learned from my background in architecture. I was building models and I was cutting a lot of paper and card and then building things in 3D and mostly just by hand cutting with a pen knife. It all started with a random idea of wanting more unique Chinese New Year zodiac animal decorations that led Nick down this path of expanding the use of his paper cutting techniques. Four years ago, he started producing and selling the zodiac paper cutting crafts publicly. So, if you just cut around this edge by following the lines. Got it. I’ll give it a shot. Some may view paper cutting as a very old-fashioned kind of trade, but Nick over here has decided to inject new life into this very old craft. He even quit his corporate job about one year ago to pursue this. That’s because he truly believes there’s a lot more opportunity in this in order to further extend the life of such crafts. Today he’s collaborating with international brands like Dior and apparel retailer Lululemon and his projects are not limited to staying on paper. So outside of Chinese New Year, I would collaborate with luxury brands uh clothing stores um to help them design workshops for example their VIP guests can come and experience rather than just giving out gifts. I do hope I am keeping the tradition alive. Even though I’m not traditionally trained through a family lineage, I do think that I try to embody parts of the traditional crafts by bringing it into new media by adding contemporary philosophies, design concepts into a fading industry, making it applicable and relevant in the daily lives are vital to breathe new life into traditional crafts. The younger generation must be able to relate to it and technology plays a key role. The society is changing. Um the community is changing. We still can using the traditional way actually to preserve in cultural heritage but it’s a slow and it’s uh a bit harder to trigger younger generations interests to get in touch of uh intangible cultural heritage. So um that is why I think uh digital technology actually will be able to promote trigger the interest. Even the cultural heritage center whose aim is to preserve the very history and techniques of old Hong Kong handmade crafts is keeping up with the times and relying on technology as an outreach to the younger crowd. Craftsmanship is the core. I think um technology is a means. We make use of different kinds of means. We can make use of interactive programs, some QR code for audio guys to uh deliver the main informations of a particular intangible cultural heritage items to the public. So many young people actually is interested in learning about the intangible cultural heritage. Technology can coexist with preservation many say and the increasing use of digital technology will be inevitable if the art of traditional craft making is to live on. May Wong, CNA, Hong Kong. And before we go, Australian Prime Minister Anthony Albanzi is wrapping up his state visit to China. On the sixth day of his trip, he tooured a panda breeding facility in Changdu. There he visited Fi, a giant panda that was loaned to Adelaide Zoo in 2009. The panda along with a potential breeding partner Wang Wang were returned to China last year. It’s just fabulous experience. I mean they are they are absolutely wonderful animals and of course our our Adelaide Zoo pandas are a great sign of friendship between Australia and China. When asked about how his state visit went, Mr. Albani said his time in the country had been very positive and warm and called Funny a great ambassador for China. Is the reunion we didn’t know we needed and that’s East Asia tonight. Don’t forget headlines anytime at cn.asia. Plus we are on Facebook and YouTube. [Music]

Tokyo and Washington’s top trade negotiators had a 45-minute call today. Also on East Asia Tonight: Taiwan holds air raid drill to prepare for “growing military threats” from China; Canada’s Couche-Tard drops US$47b bid for Japan’s 7-Eleven; South Korean president orders new investigation into 2022 Halloween crush; Mitsubishi buys more salmon farms in Norway and Canada; and what is driving Taiwan’s space ambitions?

00:00 Headlines
09:20 Taiwan’s air raid drill
17:12 Mitsubishi buys salmon farms
19:04 Couche-Tard drops 7-Eleven bid
26:00 Dr Chun-Yi Lee on Taiwan’s race to space and recent launch fail
38:30 Why South Korea has too much rice
42:29 Hong Kong’s disappearing paper cutters
47:03 Australian PM reunites with panda