Pesek on Asia: Xi's Corruption Battle

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Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:

Is Xi Jinping in over his head?

As China's president battles corruption, might Xi Jinping be getting in over his head? To the South China Morning Post's Jake van der Kamp, Xi's purge is either a cynical attempt to cement his power by taking out rivals, a sincere effort to improve Chinese governance, or an exercise in naiveté. The columnist fears Xi is standing before door No. 3 as the Beijing establishment lines up to protect the status quo: "It's my belief that this is the circumstance in which Xi actually finds himself, and it is my worry that he may not recognize it. He comes across to me as a true believer who may not see the danger to himself, and the consequent danger to the stability of the country."

Macau's property bubble hits locals.

Gamblers are placing their chips on something other than the sacred green felt inside Macau's increasingly ubiquitous casinos: property. This Reuters piece looks at how the Las Vegasization of the former Portuguese city is creating one of the world's biggest real-estate booms and pushing apartment prices far beyond the reach of average Macanese. At an average of more than $500,000 for a flat, Macau's housing bubble is beginning to outpace even Hong Kong's. What's more, Macau's population is seen swelling by 20 percent to 700,000 by 2016. Seems like a safe bet that this bubble will get even bigger.

Asia's dollaraddiction continues to grow.

The Federal Reserve's tapering might seem like a reason for Asia to reduce its U.S. debt holdings. Since the late 1990s, central banks have amassed trillions of dollars of Treasuries to protect economies from market turmoil. Now as the Fed prepares to hike interest rates, Asian central banks would seem to have an incentive to reduce their U.S. exposure. Oddly, they may do the opposite, Cornell economist Eswar Prasad argues. "What's for sure is that once speculators smell blood, they attack a currency relentlessly and reserves can evaporate quickly," Prasad writes. "The only way to protect a currency is to have enough reserves to deter speculators. No one knows exactly how much that will take. So the motto of central bankers has become, more is better."

Indonesia's election process heats up.

They make for incongruous allies: Susilo Bambang Yudhoyono, the stoic former general and outgoing president of Indonesia, and the youthful Metallica fan looking to replace him, Jakarta Governor Joko Widodo. While Yudhoyono hasn't formally endorsed Widodo, he's asking voters to give the young man a hearing and get to know his policies. For a look at what's at stake for the world's fourth-most populous nation, here's a Wall Street Journal Q&A with Bower Group political analyst Doug Ramage.

Samsung's smartphone challenges intensify.

The world's biggest maker of smartphones posting its second straight decline in quarterly profit is a much bigger story than just Samsung Electronics. Sure, market saturation and competition from Apple get some of the blame. But the bigger problem is soft global demand amid tepid growth in the U.S., Europe and much of Asia. South Korea's 3.7 percent growth rate is an enviable one in this uncertain world. But Samsung's woes are a reminder that the months ahead will be challenging ones not just for corporate executives, but Asia's national leaders, too.

(William Pesek is a Bloomberg View columnist. Follow him on Twitter at @williampesek.)

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Nisid Hajari at

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