Pesek on Asia: Default Jitters Abound
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
U.S. default risk unnerving Asia
Elder statesmen and pundits in Washington are stepping to the microphones to reassure the world the U.S. will not, under any circumstances, renege on its debt obligations later this month. Asian markets aren't convinced that cooler heads will prevail, as evidenced by the yen's advance and gold's continued ascent. Just a reminder to the good folks in D.C. who think playing around with America's credit rating is harmless, inside-the-beltway fun.
China's Sina, Renren ride Twitter's coattails
Investors aren't letting China's great wall of censorship get in the way of big paydays down the road. As freewheeling Twitter readies its initial public offering, China's social-media companies from Sina to Renren have been getting a boost. Tencent Holdings, Asia's largest Internet company, has also been on the receiving end of increased interest as Twitter's IPO offers a vote of confidence in the social-media industry. China's microblogging outfits would benefit far more from Beijing easing up on obsessive censorship efforts. Yet for now, they're happy to ride Twitter's coattails.
Wanted: Korean central banker as good as Kim
If South Koreans could meddle with time, and Kim Choong Soo's date of birth, they almost surely would. The Bank of Korea governor, 66, is bumping up against the typical retirement age and the end of his four-year term. Even some of Kim's critics admit he's done a top job steering the economy around crises from Wall Street to Brussels. As Lee Il Houng, an adviser to President Park Geun Hye, told Bloomberg News: “The BOK’s global status has advanced much under Kim’s leadership, which is an important asset, especially in times of crisis. This push toward globalization should be further enhanced.” Yet finding another Kim is easier said than done.
Australian mogul bets on Asia's urbanization
Bogged down by problematic infrastructure projects and boardroom dramas at home, Leighton Holdings, Australia’s biggest builder, is betting on its future on Asia. It's hard to quibble with the giant's timing as the urbanization driving Asian growth meets a global environment in which competitors are squeamish about big investments. As Chief Executive Officer Hamish Tyrwhitt tells the Wall Street Journal: Asia "is where the exciting growth opportunities are. We now have 31,000 of our 61,000 staff based in Asia, so more than half. Five years ago, only one-quarter of our employees would have been in Asia." Sounds like a strategy with solid foundations.
A new dawn for China-Taiwan relations?
Ronald Reagan's old adage, "trust, but verify," comes to mind as Chinese President Xi Jinping says his nation and Taiwan should resolve their long-standing political disagreements. The former U.S. president, of course, used the term in his dealings with former Soviet leader Mikhail Gorbachev. It's intriguing, though, that Xi wants to hold talks with Taiwan on an equal basis, even if under the “One China” policy. This distinction could be important because Beijing has long viewed Taipei as a problem child who ran away and should return home humbled and docile. Taiwan has a long, arduous road ahead to verify Xi's intentions, but this slight change in tone could reap benefits for the greater China region.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)