Pesek on Asia: China's False Hopes
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Good news ahead of China's plenum
China's non-manufacturing Purchasing Managers’ Index rose to its highest level this year in October. That may seem like stellar news for Communist Party leaders as they begin a four-day meeting on Saturday to decide on major economic reforms. In the long run, though, the numbers may turn out to be ill-timed. Healthy growth today reduces the urgency for China's government to retool an economy addicted to excessive investment, debt bubbles, cheap exports and negligible environmental protections. Some officials in Beijing may think they can breathe easy. They should think again.
Thailand braces for Thaksin
Call it the Thaksin bear market. Thai stocks fell the most in six weeks as traders and investors prepared for the chaos sure to accompany the return of former Prime Minister Thaksin Shinawatra, who was ousted in 2006. Thaksin's sister, Premier Yingluck Shinawatra, supports a bill granting amnesty for political offenses that is currently making its way through parliament. Markets clearly believe escalating tensions over Thaksin's likely return to Thai politics will deter investment. Let's just say 2014 will be a turbulent year in Southeast Asia's second-biggest economy.
India heads off to space
Tomorrow’s launch of an Indian spacecraft headed to Mars is being touted as a great scientific leap forward for the nation's 1.2 billion people. Yet let's call this mission what it really is: New Delhi's attempt to catch up with China. “There is an ongoing race for space-related power and prestige currently in Asia, although few officials will admit it,” James Moltz, a professor at the Naval Postgraduate School in Monterey, California, told Bloomberg News. "India is clearly concerned about China’s recent rise in space prestige and wants to minimize that damage.” That's all well and good, but India would get far more mileage internationally -- or intergalactically -- by fixing its economy back on Earth.
Questions abound for emerging markets
Is the age of rapid growth in emerging markets over as output approaches the 5 percent mark? It's one of the biggest questions in economics and politics today and one explored in a timely Wall Street Journal piece. As the debate rages, at least this much is clear: the easy gains derived from globalization and the early stages of industrialization are disappearing. It's now up to governments from China to Turkey to Brazil to diversify growth sources, raise competitiveness and understand that prosperity in the future depends on reforms today.
Help with Fukushima awaits
If Japan is serious about welcoming overseas help to clean up the Fukushima atomic station, U.S. Energy Secretary Ernest Moniz has a way for the nation to prove it: join the treaty known as the Convention on Supplementary Compensation for Nuclear Damage. It clarifies accident liability, creates funds for victims and sets standards for compensation claims. “As one gets into the real work, then these liability conventions become quite important,” Moniz told Bloomberg News. Prime Minister Shinzo Abe and his government, Moniz said, "emphasize that the importance of moving on this in 2014 is to a large extent driven by their openness and their desire to get as much international help as they can.” Here's one way for Abe to show he means business.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)