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Politics

Democrats on track to retake US House and set new Asia tone

Asian stocks swing as US media says Republicans hold Senate to split Congress

U.S. House Minority Leader Nancy Pelosi celebrates the Democrats winning a majority in the U.S. House of Representatives in the U.S. midterm elections during a Democratic election night party in Washington on Nov. 6.    © Reuters

NEW YORK -- The Democratic Party is on track to win back control of the U.S. House of Representatives in midterm elections Tuesday, while President Donald Trump's Republican Party is seen holding the Senate, according to media projections.

The Democrats' win in the lower chamber of Congress will mean Trump's policies toward Asia are set to face increased scrutiny from a divided Congress.

A Democrat-led House would have the power to challenge Trump's policies, including potential trade deals -- such as an agreement with China -- that would need Congressional approval. They would also be able to call hearings on foreign policy issues of their choosing. Some analysts see the Democrats using their majority to shift the conversation toward human rights in Asian countries like Myanmar, the Philippines and China.

Nancy Pelosi, the minority leader of the House and the likely next speaker, called for bipartisanship in a victory speech. She said the Democrats would restore "checks and balances" on the Trump administration. Her chief of staff, Drew Hammill, tweeted that Trump called her to extend his congratulations.

Despite his party's loss in the House, the president wrote on Twitter: "Tremendous success tonight. Thank you to all!"

Trump has shaken up Asia since coming to power nearly two years ago. He triggered a trade war with China, sought to upgrade ties with Taiwan, attacked allies such as Japan and South Korea, and even became the first sitting U.S. president to meet a North Korean leader.

Even so, the new makeup of Congress is unlikely to bring about any immediate shifts in Trump's hard line on China. He is less restricted by Congress on foreign policy than on domestic issues, and his stance on trade is also in line with the traditional Democratic view.

Herve Lemahieu, director of the Asian power and diplomacy program at the Lowy Institute, said the mixed results "won't necessarily stop his protectionist foreign policy," adding that it would have a "more limited impact."

A push to hold China accountable for human rights abuses against the Uighur minority in Xinjiang could prove a stumbling block for any steps to improve Sino-U. S. relations.

Trump is moving toward a free trade agreement with the Philippines, but this requires Congressional approval, and could be complicated if the Democrats make the extrajudicial killings under President Rodrigo Duterte's drug war a significant foreign policy issue.

Asian stocks were choppy in the wake of the midterm election results.

China's benchmark Shanghai Composite Index dipped in afternoon trading, dragging down investor sentiment across the region. Japan's Nikkei 225 index fell sharply towards the end of the session and ended 0.3% down after rising more than 1% in the morning. Stock indexes in South Korea and Hong Kong also declined in afternoon trading.

"The election outcome was in line with expectations, so today's volatility was mostly based on speculative trading and unlikely to continue tomorrow," said Chihiro Ota, general manager of investment research at SMBC Nikko Securities.

Nikkei staff writers Wataru Suzuki and Mitsuru Obe contributed to this report.

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