Pesek on Asia: Shutdown Bonus for China
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Obama pulls plug on vital Asia tour
The smiles on the faces of Xi Jinping and Vladimir Putin show why Barack Obama canceling his Asia visit is such a blow to U.S. interests. President Obama planned to attend the Asia-Pacific Economic Cooperation summit in Indonesia and also visit Brunei, Malaysia and the Philippines. Those plans are off thanks to Washington's farcical government shutdown. It sends a terrible signal of dysfunction and insularity at a time when the U.S. needs to seek out new solutions to world problems -- Syria, North Korea, economic stagnation -- and partners in those efforts. Sadly, the U.S. won't have a seat at a table that will now be dominated by China's Xi, Russia's Putin, and their smiles.
Sony's former leader shows youngsters the way
Japan needs more people like Nobuyuki Idei. The former Sony chief executive officer runs Quantum Leaps Corp., which can best be called an innovation think tank that helps young Japanese get in touch with their inner entrepreneur. Nothing would revitalize Japan faster than 25,000 Steve Jobs-wannabes with a dream hunched over a laptop building startup companies. Idei even lent support to an effort in the Western city of Fukuoka to create Japan's answer to Silicon Valley. Here's a timely Bloomberg News piece on Idei's latest passions, which include backing $82,000 Japanese-made electric cars.
A silver lining in India's currency plunge?
India's brush with a full-blown financial crisis is having at least one good side effect: encouraging American executives to move factories in Asia’s third-largest economy. China is still the world's factory floor, but multinational companies have long been urged by shareholders to avoid putting all of their proverbial eggs in one basket. Serendipitously, India has been looking to increase manufacturing jobs. The rupee's 16 percent drop in the past 12 months is still reason for worry, as are the nation's current-account surplus and political paralysis, but in the search for silver linings India's growing affordability deserves a mention.
Does Bank of Japan need to do more?
Haruhiko Kuroda has had a remarkably busy year for a Japanese central banker, doubling the monetary base in April and devising fresh strategies to end deflation. That's not enough, warns one of Prime Minister Shinzo Abe's top advisers, Etsuro Honda of Shizuoka University. Honda told the Wall Street Journal that it's up to Kuroda to offset a sales-tax increase to 8 percent from 5 percent in April. The BOJ “will probably find itself with no choice but to act, as there is likely to be a significant reactionary plunge” in consumer spending, Honda said. It doesn't mean the BOJ will move again soon (it refrained from action today), but rising political pressure means Kuroda's 2014 could be just as busy as 2013.
IMF adjusts to 'epic' emerging-market shift
The moment Alice Amsden explored in her 2001 book, "The Rise of the Rest" is now upon us. The Massachusetts Institute of Technology economist was an early proponent of the idea that the West had better watch its back and avoid complacency. That very dynamic is unfolding on Christine Lagarde's watch as head of the International Monetary Fund head. But the shift from developed nations holding the power to developing ones won't necessarily go smoothly. The world economy, she says, is experiencing “transitions on an epic scale” and "the immediate priority is to ride out the turbulence as smoothly as possible." Buckle your seatbelts!
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)