Pesek on Asia: Malaysia's China Problem
Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Malaysia's latest China problem.
If Malaysian Prime Minister Najib Razak was hoping April would offer a reprieve from the March madness that preoccupied his government, he's not getting one. Even as Malaysia works with more than two dozen nations to find missing Flight 370 and fends off allegations of incompetence from Beijing, it faces a fresh crisis: A Chinese tourist and a Filipino staff worker were kidnapped from a resort in the Semporna area in Sabah. China wants Malaysian police to carry out rescue efforts that will put Najib's nation, and his government's legitimacy, under fresh scrutiny. Let's hope Malaysia handle the newest crisis better.
Indian's Rajan sacrifices developers.
The frowns on the faces of India's developers are great news for the nation's economic prospects. They show that Reserve Bank of India Governor Raghuram Rajan is taking a page from Paul Volcker's playbook. In the late 1970s and early 1980s, the then-Federal Reserve chairman enraged developers with his tight grip on credit, inviting reams of hate mail. Likewise, Rajan is risking the ire of this powerful business sector in his efforts to tame inflation. What's bad news for developers today is probably good in the long run for India's 1.2 billion people.
China is all about that 7.5 percent.
Growth or economic reform? In recent months, Premier Li Keqiang insisted China would sacrifice the former in order to carry out the latter. Today, Li admitted that was all spin as he unveiled a fresh stimulus package to ensure Asia's biggest economy meets its 7.5 percent growth target. As Peking University professor Michael Pettis points out, China watchers tend to consider two nightmare scenarios for the next 10 years: China becoming the USSR politically or Japan economically. While Pettis cautions we're years away from having a clue, I worry that choosing short-term growth over long-term reform to wean China off excessive investment and exports is a mistake Li will regret sooner rather than later.
Singapore and Philippines join hands.
The search for Malaysian Air Flight 370 has been an extraordinary example of global cooperation. But it also exposed the undercurrent of distrust that pervades Asia, a region that lacks a North Atlantic Treaty Organization-like organization to facilitate the sharing of intelligence or pool resources in times of conflict. Amid that void, it's heartening to see the Philippines reaching out to neighboring Singapore to strengthen defense and security cooperation. The rest of Asia should be watching and plotting out its regional alliances.
Japan's yakuza goes online.
Mobsters in New York, Sicily or Moscow tend to abhor the spotlight. But in Japan they have publicly-known headquarters, pass out business cards and, now, even launch websites. As this Guardian piece points out, it's all about buttressing the yakuza's image in a nation that often takes an ambivalent view of the tens of thousands of gangsters in its midst. And the siteeven features a theme song. Who knew mobsters could be such savvy marketers?
(William Pesek is a Bloomberg View columnist. Follow him on Twitter at @williampesek.)
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