Pesek on Asia: Korea's New Sandwich
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
New South Korean sandwich.
Officials in Seoul have long grappled with the “Korean sandwich.” For all its merits -- healthy growth, rising standard of living, educated workforce and world-class companies -- Korea is sandwiched between wealthy Japan and low-cost China. In an interview with Bloomberg News, President Park Geun Hye indicated that there's a new sandwich on the menu, involving the U.S. and China. Korea wants to join the U.S.-led Trans-Pacific Partnership trade talks (which exclude China) and also make progress toward a commercial deal with Beijing. It's a wise hedging strategy as a rising won threatens exports and relations with Japan deteriorate. Just as long as Park also accelerates efforts to build a more innovative domestic economy.
No holiday in Cambodia for Hun Sen.
Punters betting against Cambodian Prime Minister Hun Sen have been on the losing side for almost three decades now. But Asia's longest serving leader and resident strongman is on the defensive as anti-government protests swell in size and frequency. A fighter at heart (he lost an eye in battle in 1975), Hun Sen probably isn't going anywhere in the near future. But much good could come from new management in Phnom Penh.
An anti-nuclear candidate for Tokyo.
Shinzo Abe can't be happy to see Morihiro Hosokawa running for Tokyo governor. Prime Minister Abe is an unapologetic champion of the nuclear industry and former Premier Hosokawa calls Abe’s cheerleading a "crime" given the nation's seismic risks. The Tokyo governorship is arguably the second-most important office in Japan and offers its holder quite a megaphone. Hosokawa occupying it and rallying the masses against Tokyo Electric Power Co., which runs the reactors at Fukushima, would be a big blow to Abe's Liberal Democratic Party -- and to building new power plants. Abe might even be forced to devise an energy future less dependent on reactors, which is something most Japanese want.
America's banker is now the biggest trader.
China not only holds the biggest arsenal of U.S. Treasuries ($1.3 trillion), but an increasing number of the cards on the global trade front. In 2013, China surpassed the U.S. as the world's biggest goods trader -- a year that wasn't exactly chummy between Beijing and Washington. This Financial Times piece also argues that even if China fudges its trade data (many think it double counts on certain transactions), China is still blowing past the world's biggest economy. Let that be a lesson to those in U.S. Congress who still harbor the fantasy Beijing can easily be pushed around by Washington.
And now, some good news from India Inc.
The last 12 months were pretty rotten for India's macroeconomy: growth dropping below 5 percent; the rupee hitting new lows; inflation surging; bank bad loans at a record high. Now comes some good news from the private sector, and India's much-ballyhooed tech sector to boot: Profits are up at Infosys. India's second-largest software exporter has long captivated the nation's imagination -- it's the kind of scrappy and innovative company that China, for all its big growth numbers, has yet to create. After a variety of restructuring and cost-cutting efforts, the hope is that Infosys is a harbinger of better times ahead for India's corporate sector.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)