Pesek on Asia: Vietnam Plots New Course

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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:

Vietnam plots course away from China.

Vietnam is often viewed as a mini-China on account of its communist system and the economy's heavy reliance on big state-run enterprises. Traditionally, close ties between Hanoi and Beijing brought huge economic benefits. That was until territorial disputes and Beijing's assertive moves to begin drilling for oil in disputed South China Sea waters unsettled trade relations. Now, Vietnam is looking for other sources of growth beyond China. Here's a look at what's at stake and the options available to the nation's 90 million people. It's great news that gross domestic product rose at a healthy 5.25 percent in the second quarter. But officials in Hanoi must work even harder on diversification to maintain that pace.

China's fake gold scandal.

Anyone who's surprised China uncovered $15.2 billion of loans backed by falsified gold transactions hasn't been paying attention to the nation's shadow-financing bubble. My own advice: add a zero to that figure. Where else in China Inc.'s increasingly opaque economy is collateral for loans pledged multiple times? I'm thinking real estate, infrastructure projects such regional airports and sports stadiums, shipping, commodity-financing of all kinds, you name it. China's fake gold trades are the tip of the proverbial iceberg. Too bad President Xi Jinping seems more interested in keeping the international media from uncovering such double-counting scams than addressing them.

Thailand lowers economic sights.

As Thais debate how long the junta that took control of their government on May 22 will be in power -- months, years, longer? -- the economy is already taking hits. The latest: growth in exports will probably undershoot this year's target of 3.5 percent. Just another reminder that the generals controlling Thailand must be far more careful with Southeast Asia's second-biggest economy. At the moment, they're shooting the nation's potential in the foot.

How Japan excuses the inexcusable.

Tokyo-based David McNeill is as good as it gets when it comes to journalists exploring Japan beyond the headlines and superficial quirkiness. Among his books is the excellent "Strong in the Rain," an account of the events leading up to and after the nuclear crisis at Fukushima, co-written with Lucy Birmingham. Here, in the Economist, McNeill paints a troubling picture of the tendency of Prime Minister Shinzo Abe's government to excuse inexcusable actions with legal loopholes and obfuscation in ways that hurt Japan's diplomacy and global brand. It's worth a read as McNeill looks at Abe's handling of Japan's World War II sex-slave problem, one he'd rather lawyer away than confront.

Tepco shareholder meeting gets spirited.

On the bright side in Japan, Tokyo Electric Power, the incompetent outfit responsible for the Fukushima crsis, got an unusually hard time at its annual general meeting. While Tepco ignored protesters outside and pledged to restart reactors at the world's largest atomic plant, some shareholders inside were quite vocal, too. As one reportedly asked executives: "Why doesn't Tepco management flat out say that nuclear power won't make a profit?" The nuclear industry is Tokyo's equivalent of the military-industrial complex that holds such sway over Washington, with Abe himself very much on board. Still, it's good to see Japan's notoriously docile shareholders speaking out.

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

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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Willie Pesek at