Pesek's View From Asia
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
As trading volumes in Shanghai surge, China's yuan is this year's best-performing emerging-markets currency.
With all the volatility in Chinese markets -- a computer glitch may have caused a temporary 5 percent surge in Shanghai's index today -- one could easily miss trends that may prompt authorities to widen the currency's trading band for the first time since April 2012. A more flexible exchange rate is a pivotal part of China shift away from exports to a demand-led growth model. Ironically, China's slowdown may embolden policy makers to introduce one. Bets that gross domestic product will disappoint markets mean yuan speculation is no longer a one-sided affair. Even given uncertainties about China's ability maintain healthy growth, the time could be ripe for a less managed currency.
Indonesia's Susilo Bambang Yudhoyono called on Egypt to halt its violent crackdown and give democracy a try.
Admittedly, the generals in Cairo may not care what anyone in Jakarta thinks. They should. Yudhoyono presides over the nation with the world's largest Muslim population -- a sprawling, multiethnic archipelago that barely a decade ago stood on the brink of disintegration and chaos. Under his stewardship the economy is growing, politics have stabilized, and Indonesia is heading for yet another peaceful transfer of power next year. It's good that Yudhoyono feels comfortable speaking out, too: Not since the glory days of former Singapore leader Lee Kuan Yew has Asia had a strong and globally resonant voice. A little statesmanship is a good thing -- whether in Jakarta or Cairo.
China is producing millionaires at the slowest pace in five years.
Blame the decline on the nation's shaky stock market. According to Hurun Research Institute and consultancy GroupM Knowledge, the number of Chinese accumulating fortunes of at least 10 million yuan ($1.6 million) in 2012 rose just 3 percent to 1.05 million people from a year earlier. The ranks of the ``super-rich'' boasting personal wealth of at least $16 million rose just 2 percent. The numbers suggest China's slowdown had begun long before the government admitted it, raising yet more questions about the veracity of official GDP data.
Pyongyang was revealed to have provided Havana with free weapons in the 1980s.
Those Kim Dynasty folks sure can be a generous bunch -- at least to fellow tyrants. In an essay carried in official media, Cuba's Fidel Castro decided to opine on elevated tensions on the Korean Peninsula. He also detailed how North Korea's founder, Kim Il Sung, provided 100,000 Kalashnikov assault rifles to Cuba for free in the 1980s. Ancient history? Last month's discovery of a North Korean ship on its way to Cuba laden with fighter jets and other undeclared military gear proved otherwise. Three generations into the Kim Dynasty, North Korean and Cuban leaders are still great comrades.
Singapore's curbs on foreign workers create labor shortages that may undermine growth.
Earlier this year the government began responding to complaints about excessive immigration and the rising cost of living by restricting the influx of low-skilled workers. Over the next four years Prime Minister Lee Hsien Loong plans to expand those limits to medium-skilled workers, which is already leading to tightening labor markets. The risk is that Singapore forgets how important an open border has been to its economic success. It's fine to placate voters in the short run. But Lee should remember that foreign talent and energy encourage innovation and economic dynamism -- exactly what the tiny city-state needs to thrive.
** It's that time of year, folks -- I'll be on leave for the next week. Hope you've been enjoying this new daily feature. I'll be back at it on Monday, Aug. 26.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)