The Daily Update: Kishida Wins / Evergrande Sells

Fumio Kishida has won the race to become Japan’s next Prime Minister, replacing Yoshihide Suga as leader of the Liberal Democratic Party, who stepped down after serving only one year since taking office last September. Kishida, the former Foreign Minister, moved ahead of Sanae Takaichi and Seiko Noda, two female candidates, before seeing off Taro Kono in the runoff. Kishida is certain to be elected as the next PM when parliament convenes on Monday, given the LDP's majority in the Lower House.

The new PM will certainly have a full intray when he takes office. The LDP’s approval ratings were at an all time low under Suga, less than 32%, having collapsed over the government's handling of the coronavirus as well as the decision to go ahead with the Olympics. The party has also been accused of a complacency and an increasingly high-handed approach to governing. Kishida, 64, now faces a general election that must be held by late November. In an acceptance speech, Kishida vowed to lead a transformed party.

Kishida is widely regarded as a reliable pair of hands, despite a low-key presence that has sometimes been characterised as a lack of charisma. He has pledged to spend big on a new pandemic stimulus whilst vowing to tackle income inequality and move away from the neo-liberal economics that have dominated Japanese politics for the past two decades.

Also, Evergrande, struggling to avoid defaulting on its mountain of debt, said it plans to raise USD1.5bn by selling part of its stake Shengjing Bank to a state-owned asset management company. As part of the deal, Shengjing Bank, who are one of Evergrande’s main lenders, has demanded that all net proceeds from the disposal be used to settle the financial liabilities according to an exchange filing. The sale will be subject to approval from the China Banking and Insurance Regulatory Commission and the Assets Supervision and Administration Commission. Evergrande said in a statement that its liquidity crunch had ’adversely affected’ Shengjing Bank in a material way. ‘The introduction of the purchaser, being a state-owned enterprise, will help stabilise the operations of Shengjing Bank’ Evergrande said.