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Trump says Venezuela does not give China a Taiwan precedent, but 'it's up to' Xi
 U.S. President Donald Trump said it’s “up to” Chinese President Xi Jinping what China does regarding Taiwan, but warned he would be “very unhappy” if Beijing changed the current status quo, in a New York Times interview. Trump said he doesn’t expect Xi to act against Taiwan during his presidency, which runs until 2029, and rejected parallels with the U.S. operation in Venezuela. China calls Taiwan an internal matter; the U.S. supports Taiwan’s defence despite no formal ties.
(Reuters, 05.01.26)
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The future of AI in Asia Pacific: 4 key trends to watch in 2026
In Asia-Pacific, agentic AI is set to disrupt business models for 70% of organisations within 18 months (IDC). Key 2026 trends include: demanding holistic visibility into AI agents for cost control and ROI measurement; obsolescence of human-centric identity systems in agent-to-agent interactions, requiring new governance; security teams focusing on high-impact use cases like threat detection and incident triage; and strategic human-AI collaboration as a competitive differentiator, with 90% of executives expecting agentic AI to become standard within three years, optimising task allocation for innovation and efficiency.
(ETCIO, 05.01.26)
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Trade and Economic Affairs
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2025 APEC Leaders’ Gyeongju Declaration - October 31 to November 1, 2025
 The 2025 Asia-Pacific Economic Cooperation Economic Leaders’ Meeting in Gyeongju, South Korea, adopted the Gyeongju Declaration under the theme “Building a Sustainable Tomorrow,” with priorities of Connect, Innovate, and Prosper. Key outcomes included endorsement of the APEC AI Initiative to advance regional AI transformation, capacity building, and trustworthy infrastructure; adoption of the APEC Collaborative Framework for Demographic Changes to address ageing populations and urbanisation; and approval of the Strengthened and Enhanced APEC Agenda for Structural Reform (SEAASR) 2026-2030.
Leaders reaffirmed commitments to resilient supply chains, implementation of the digital economy roadmap, inclusive growth for MSMEs, and energy and food security, while recognising cultural and creative industries as important economic drivers amid ongoing global trade challenges.(APEC Official website, 01.11.25)
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Singapore GDP Jumps 4.8% in 2025
Singapore’s economy grew by a robust 4.8 per cent in 2025, exceeding the official forecast of around 4 per cent and private sector expectations of 4.1 per cent, while also surpassing the 4.4 per cent expansion recorded in 2024. Prime Minister Lawrence Wong attributed this stronger-than-expected performance to global resilience, delayed and milder U.S. tariffs, and surging demand for semiconductors driven by the AI boom.
These factors helped keep unemployment and inflation low while raising real incomes. However, Wong cautioned that sustaining such growth would be challenging in an increasingly fragmented global environment marked by fractured trade relations and deepening geopolitical tensions. He announced that Deputy Prime Minister Gan Kim Yong is leading a review of economic strategies, with proposals expected ahead of Budget 2026.
(Nikkei Asia, 31.12.25)
Indonesia Close to U.S. Trade Deal
Indonesia is poised to finalise a landmark trade deal with the U.S. by late January 2026, resolving months of uncertainty and strengthening ties with a major global partner. Coordinating Minister for Economic Affairs Airlangga Hartarto announced in December 2025 that all essential issues had been settled, with the interests of both nations protected. The agreement text has been completed following intensive consultations.
Hartarto's statement came after a meeting in Washington with U.S. Trade Representative Jamieson Greer. The pact is expected to remove lingering uncertainties for Southeast Asia's largest economy while deepening bilateral commercial relations.
(Firstpost, 23.12.25)
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ADB Lifts Growth Outlook for Developing Asia-Pacific
The Asian Development Bank (ADB) has upgraded its 2025 growth forecast for developing Asia and the Pacific to 5.1%, a 0.3 percentage point increase from September, driven by robust expansion in India and strong exports from high-income technology economies. The 2026 projection was raised by 0.1 percentage points amid easing trade uncertainties from new agreements. However, growth is expected to slow to 4.6% in 2026 due to elevated US tariffs and subdued global economic activity.
(China Daily, 10.12.2025)
India-US sign 10-year defence pact amid tariff turmoil
India and the US signed a 10-year framework agreement to expand defence cooperation, announced after Defence Ministers Rajnath Singh and Pete Hegseth met in Kuala Lumpur. The pact enhances coordination, information sharing, technology cooperation, and regional stability in the Indo-Pacific. It signals deepening strategic ties amid efforts to conclude a trade deal, despite tensions from US President Trump's 50% tariffs on India, including penalties for Russian oil and arms purchases. Delayed from mid-2025 due to prior frictions, the agreement builds on growing interoperability and technology access.
(BBC News, 31.10.2025)
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Thailand Frees 18 Cambodian POWs Under Ceasefire
Thailand released 18 Cambodian prisoners of war (POWs) on December 31, 2025, held for five months, in compliance with a ceasefire agreement signed by both nations' defence ministers. The repatriation took place at a border checkpoint between Chanthaburi and Pailin provinces and was intended to build goodwill and adhere to international humanitarian principles.
The freed soldiers were flown to Phnom Penh, where they were emotionally reunited with their families and later met Prime Minister Hun Manet amid public celebrations. The release followed a sustained 72-hour truce and removed a key obstacle to normalisation of relations after destructive border clashes. The U.S. State Department welcomed the move as a step forward under the Kuala Lumpur Peace Accords.
(AP News, 31.12.25)
Rare Quad Meet Signals China amid Taiwan Tensions
Ambassadors from Quad nations India, the U.S., Australia, and Japan held a rare public meeting in Beijing on December 30, 2025, amid escalating Chinese military drills around Taiwan. U.S. Ambassador David Perdue described the Quad as a "force for good" in upholding a free and open Indo-Pacific, sharing a photo from the U.S. Embassy gathering.
The meeting, which included Indian Ambassador Pradeep Kumar Rawat, is widely seen as a signal to China, which views the Quad as a U.S.-led containment effort and has historically criticised it as an "exclusionary clique".
(Moneycontrol News, 31.12.25)
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Japan 2026 Snap Poll? Four Possible Scenarios
Japanese Prime Minister Sanae Takaichi is considering a snap election for the lower house in 2026. Possible timing options include early spring (after the budget is passed), early summer (after key legislation and the rollout of a growth strategy), or autumn (after a cabinet reshuffle and a potential visit to the U.S.).
Takaichi is focused on implementing her economic agenda through a supplementary budget to sustain high approval ratings. Risks include potential market instability arising from expansionary fiscal measures. Avoiding dissolution altogether remains an option, though it could complicate her re-election as LDP Leader in 2027.
(Nikkei Asia, 31.12.25)
How China’s Latest Taiwan War Games Differ?
China conducted large-scale military exercises, codenamed Justice Mission 2025, around Taiwan, marking the sixth major exercise since 2022. The exercises involved naval vessels, aircraft, drones, and live-fire long-range rockets, simulating the encirclement of the island, blockades of key ports, such as Keelung and Kaohsiung, and strikes on critical infrastructure.
Described as the largest in terms of geographic coverage, the drills breached Taiwan’s territorial waters and disrupted international air and sea routes. Triggered by a US$11.1bn arms sale to Taiwan and Japan’s stance on collective self-defence, China characterised the exercises as a deterrent against “separatist” forces. Taiwan closely monitored the incursions, cancelled flights, and condemned the provocation. President Trump downplayed concerns, citing his relationship with Xi Jinping.
(Aljazeera, 30.12.25)
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North Korea Advances Nuclear-Powered Submarine Programme
 North Korea revealed significant progress in building an 8,700-tonne nuclear-powered submarine, with state media photos showing a largely complete hull during Kim Jong Un's visit to a shipyard.
Kim condemned South Korea's U.S.-backed efforts to acquire similar technology as an "offensive act" violating North Korean security, emphasising the need to advance his navy's nuclear armament. Experts suggest the vessel, intended for nuclear weapons, may have core components installed and could undergo sea trials within months.
(AP News, 25.12.25)
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Chung-Hua Institution for Economic Research (CIER)
 On December 09, 2025, CIER and Dun & Bradstreet Taiwan launched the “Report on Investment Trends of Taiwanese Companies in ASEAN (2018-2024)” in person and online, to support the domestic industry, government, and academia in understanding market dynamics amid the ongoing global geopolitical landscape. In particular, the study reasserted ASEAN’s growing importance to Taiwanese overseas investment, driven mainly by supply-chain restructuring amid the U.S.-China trade conflict, the COVID-19 pandemic, and U.S. House Speaker Nancy Pelosi’s visit to the island.
CIER joined forces with the Chinese National Federation of Industries (CNFI) in co-organising two seminars discussing Southeast Asia’s current state of affairs in regional supply chain last December 11 entitled the 2025 International Conference on “ASEAN in the Second Trump Administration: Strategic Challenges and Policy Opportunities” held in English, and the “20th Southeast Asia Economic and Trade Work Promotion Platform Conference: ASEAN’s Industrial Development Prospects and Emerging Business Opportunities amid Geopolitical Shifts” held in Chinese.
In pursuit of delivering quality publications on the latest economic developments in Taiwan and the region, the Taiwan ASEAN Studies Centre, CIER has taken a leading role in publishing ASEAN-centric articles following these developments through its biannual ASEAN Outlook series released in December 2025, covering topics such as the “Brief Analysis of the 47th ASEAN Summit (2025)” and “ASEAN at Fresh Tides Post-2025: Navigating Expansion, Shaping Resilience, and Gauging the Course of ASEAN Centrality”
CIER also published its annual economic outlook covering a range of important contemporary economic topics. Our November 2025 economic outlook focused on the subject of “300 Days of Trump’s New Agenda: Challenges Facing Taiwan”, including articles on:- “The Role of Taiwan Under U.S. Semiconductor and AI Regulation,” and “Trump 2.0 Tariff War and the Shift in Taiwanese Companies’ Global Deployment: The Strategic Position of Vietnam and Mexico” and more. |
Center for Indonesian Policy Studies (CIPS)
Australian Risk Policy Institute (ARPI)
 The Australian Risk Policy Institute (ARPI®) released an update to the Top 10 Global Vulnerabilities on October 23, 2025. Vulnerabilities differ from risks in that they precede risks and represent the potential for strategic risks with significant consequences.
Secondly, ARPI® has released a further Perspective on the recent Bondi massacre, which occurred on December 14, 2025 |
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In recent months, CIPS published 
During this quarter, IndUS Tech focused on developments in the Indo-Pacific region, with particular emphasis on India-U.S. strategic and security cooperation. IndUS Tech published articles which examine key dimensions of the Indo-Pacific, including maritime security, defence modernisation, supply chain resilience, and strategic partnership between India and the United States. Articles published:-