Asia

FTChinese.com editor-in-chief Lifen Zhang says the focus is not just on China’s economic power but its foreign relations. He also says Chinese business remains cautious about spending its cash piles.

By Martin Arnold, Banking Editor, in Davos

The first of many debates about China at Davos this year made an unexpectedly hostile debut this morning as Zhang Xin, head of Beijing’s biggest property developer Soho, was put on the spot over the country’s crackdown on corruption.

“Your industry is one of the most corrupt in China,” said moderator Andrew Browne, China editor of the Wall Street Journal, as he asked Ms Zhang to share her views on the issue. Read more

It’s back to the pivot. With the Iran deal half-done, the Obama
administration is now starting to shift its attention to Asia. After national
security adviser Susan Rice gave her first speech on the subject last week,
vice president Joe Biden will visit north Asia from Sunday, preparing the
ground for a presidential swing through the region in the spring.

Biden will fly straight into the centre of a new political storm – literally,
in this case – after China declared on Saturday that a large part of the
East China Sea was its own air defence zone
. The new Chinese rules
oblige aircraft of other countries to inform Beijing of their flight plans
through the area, or potentially face “defensive emergency measures”. Read more

By Richard McGregor

When the US and Australia hold their annual top-level security consultations in Washington on Wednesday, they will doubtless exchange the usual bromides about the enduring value and strength of their alliance.

But the Australia defence and foreign ministers might also want to vent a little as well to their counterparts about the diplomatic mess that the former US intelligence contractor, Edward Snowden, has landed them in.

The revelation that the National Security Agency, America’s eavesdropping body, had bugged the mobile phone of German’s chancellor, Angela Merkel, provoked a crisis in Washington’s ties with Berlin. Mr Snowden has given Australia its own “Merkel moment” this week, with the publication of leaked documents detailing how Australia’s Defence Signals Directorate bugged the phones of top Indonesian leaders. Read more

By Gideon Rachman
Foreign commentators and local bloggers regularly predict that China is heading for an economic and political crisis. But the country’s leaders are in strikingly confident mood. They believe that China can keep growing at more than 7 per cent a year for at least another decade. That would mean the country’s economy – already the second-largest in the world – would double in size. And, depending on the assumptions you make about US growth and exchange rates, it would probably mean that China becomes the world’s largest economy by 2020.

Barack Obama with Mahmoud Abbas at the UN (JEWEL SAMAD/AFP/Getty Image)

“Let there be no doubt: in the Asia-Pacific of the 21st century, the United States of America is all in”, declared Barack Obama in a speech to the Australian parliament in November 2011. But Asians might be excused for having a few doubts about that now that Obama has cancelled half of his upcoming trip to Asia – so that he can stay at home and concentrate on his budget fight with Congress. For the moment, the president is still planning to travel to the Apec summit in Bali. But even that promise is under review, depending on what’s happening in Washington. It would be acutely embarrassing if Obama cancelled the trip to Apec, since it would be the third time he has failed to show up for a scheduled trip to Indonesia. Previous efforts to visit the country that he lived in as a child were cancelled – in March 2010 and then again in June of that year – because of an argument, first over health-care and then over BP. Read more

It’s no secret that the US is at the centre of global trade. But how is what it trades with the world changing? The US International Trade Commission, the independent government agency which investigates anti-dumping cases in the US and also acts as a trade data clearinghouse, this week put out its annual “Shifts in US Merchandise” report. Here’s four things in the report worth thinking about:

1. Americans love their cars and their iPhones. They were the biggest contributors to the $10bn widening of the US trade deficit in 2012. Read more

By Gideon Rachman
Japan’s public diplomacy hovers between the ludicrous and the sinister. In recent months, the country has specialised in foreign policy gaffes that seem designed to give maximum offence to its Asian neighbours while causing maximum embarrassment to its western allies.

By Gideon Rachman

The world is so busy cheering on the emergence of democracy in Myanmar that it is in danger of averting its eyes from the assault on democracy in another Asian state – Sri Lanka.

A recent cartoon in the China Daily depicted the Statue of Liberty holding a listening device instead of a torch and a tape-recorder in place of a legal tablet. The Global Times, in both its Chinese and English editions, noted what it said was US “aggressiveness in cyberspace” and its “hypocrisy in saying one thing and doing another” – a reference to Washington’s demands that China stop its nefarious hacking campaign. The Global Times even suggested Beijing keep Edward Snowden, the former intelligence contractor who leaked information about US domestic and international information-gathering activities, and milk him for all the information he’s worth. “This concerns China’s national interest,” it said. Read more

Sampling wine at a Shanghai wine fair (AFP)

As the China-EU solar dispute deepens, oddly enough, wine has been brought into the fray.

Here are seven interesting factoids you may (not) know about China and wine.

1. Chinese investors have bought up 30 French chateaux vineyards over the past four years and they aren’t stopping at that. There’s another 20 deals in the pipeline. Will they be affected by any probe?

2. Chinese wine importers were prominent bidders in the recent Elysee wine sale.

 Read more

By Gideon Rachman
The world will be watching the body language at this week’s US-China summit. If Barack Obama and Xi Jinping can establish a friendly rapport, they will challenge the fatalistic notion that China and the US are doomed to confrontation. That pessimistic view is underpinned by an economic shift that the Americans find uncomfortable: by 2016, Mr Obama’s last year in office, China’s economy is likely to be larger than that of the US.

South Korea is, in many ways, an incredibly impressive place. It was as poor as India in the 1950s, but now has wealth levels comparable to Spain or New Zealand. It is also now the 12th largest economy in the world, measured according to purchasing power. It has produced world-beating companies like Samsung and Hyundai – as well as a vibrant pop-culture.

Yet, talking to South Koreans, it is pretty apparent that there is also a darker side to the country’s economic miracle. There are two particularly shocking statistics. South Korea has the highest suicide rate in the developed world. And it also has the lowest birth-rate in the developed world: 1.2 children are born for every woman. As a result, the society is ageing very rapidly. One prominent economist in Seoul told me that if the country cannot turn around its demographics, “South Korea will implode in two generations time.” Read more

France’s cultural commissars should hop on a plane and visit South Korea. Any fatalism about the relentless march of English-speaking entertainment would be banished if they did what I did earlier today in Seoul – and visited the purveyors of K-Pop. Korean pop music not only dominates its local market. It has also gone global.

Of course, the most famous single K-Pop hit was Psy’s “Gangnam Style”, which topped the charts in 30 countries last year. But K-Pop has been a phenomenon for almost 20 years now – and it is just getting bigger. Read more

 Najib Razak, Malaysia's prime minister

Najib Razak, Reuters

In the New Straits Times, Malaysia’s solidly pro-government newspaper, a beaming prime minister Najib Razak is pictured in an advertisement. It lists a range of goodies he promises for the electorate if his ruling coalition is voted in at Sunday’s landmark general electionRead more

On Friday, South Korea advised the 175 workers left at the Kaesong industrial park in North Korea to leave for their own safety. Photographer Chung Sung-Jun captured part of the journey for Getty Images. In a set of striking photos, cars and vans are shown piled high with factory goods, to the extent that some of the drivers appear to have had no clear view through their windscreens. The workers joined compatriots who have left the zone since work was suspended earlier this month as a result of the escalating tension between Pyongyang and Seoul.

Seven South Koreans were held back on Monday, according to the BBC:

“Officials said the North insisted that some South Korean staff remain to negotiate unpaid wages. They did not believe the seven would be at risk.”

APRIL 27: South Korean workers arriving from the Kaesong joint industrial complex in North Korea at the inter-Korean transit office on April 27, 2013 in Paju, South Korea. (Photo by Chung Sung-Jun/Getty Images)

The FT’s Song Jung-a reported on the start of the exodus a few weeks ago:

“Long lines of cars and trucks loaded with heavy luggage crossed the border gate into South Korea this week as South Korean workers brought raw material and half-finished products back to minimise losses.”

APRIL 27: South Korean workers arriving from the Kaesong joint industrial complex in North Korea at the inter-Korean transit office on April 27, 2013 in Paju, South Korea. (Photo by Chung Sung-Jun/Getty Images)
Kaesong began operating in 2004 – the product of the first inter-Korean summit in 2000, and a symbol of the potential for economic cooperation between the two Koreas.

According to a US congressional research note from 2011, products manufactured in the industrial park include “clothing and textiles (71 firms), kitchen utensils (4 firms), auto parts (4 firms), semiconductor parts (2 firms), and toner cartridges (1 firm).” Read more

Over the past year, there have been security and war scares all over East Asia – but Taiwan, the traditional hot spot, remained strikingly cool. In recent months, Japan and China have jostled over their disputed islands and the North Koreans have threatened America and the South with nuclear weapons. By contrast, Taiwan has not been at the centre of a good war scare since the Straits crisis of 1996. Visiting the island, a few weeks ago, I was told by a senior member of the security establishment that – “We look like an island of calm in a boiling sea.”

Perhaps the Taiwanese were feeling left out? Because, together with China, they have succeeded in creating some waves over the past week. First, the Taiwanese government staged its first live-fire security exercise since 2008. And this event was swiftly followed by the revelation that China has deployed missiles near the island that are capable of threatening American aircraft carriers. This is significant, because the carriers are the basis of American power in the Pacific. And, in the Straits crisis of the mid-90s, it was the dispatch of US carriers to the area that signalled that America was taking a tough stance. Read more

Is war with North Korea imminent?

In the last two weeks, tension on the Korean peninsula has risen dramatically, as North Korea has threatened to target US territories in the Pacific and blocked South Korean workers from entering a joint industrial complex in the North. In this week’s podcast, John Aglionby is joined by Geoff Dyer, diplomatic correspondent and Jamil Anderlini, Beijing bureau chief, to discuss whether Kim Jong-eun’s escalating rhetoric is purely sabre-rattling or if we should be worried about his threats.

The thing about MAD is that it requires both sides to be sane. Ever since the onset of the nuclear age, the doctrine of mutually assured destruction, or MAD, has kept the peace. The calculation that, ultimately, no rational political leadership would risk millions of deaths in their own nation has seen the world through some perilous moments – from the Cuba missile crisis to the fall of the Berlin Wall.

Lee Kuan Yew on March 20 (Chris McGrath/Getty)

Lee Kuan Yew on March 20 (Chris McGrath/Getty)

Sightings of Lee Kuan Yew, Singapore’s former prime minister, are rare these days. He is 89, physically frail and was hospitalised briefly in February.

But on Wednesday he popped up at a conference organised by Standard Chartered bank in the city’s Shangri-la Hotel, taking part in a “fireside chat” with Paul Volcker, the 86-year old former US Federal Reserve chairman.

Most people in the audience, which included the finance minister of the Philippines, were probably just as interested to see how the architect of modern Singapore looked, as in what he might have to say.

The last time I can remember seeing him in any public setting was last August, when he made a surprise appearance at Singapore’s national day celebrations.

The night before, taxi drivers were telling their passengers that the great man had died. His appearance silenced that gossip, but Singaporeans have been more conscious of their former leader’s mortality ever since.

Lee looked thin on Wednesday, but was dressed sharply in a dark blue Chinese silk jacket, with red cuffs. He made his way unaided to the stage and sat down. The only concession to physical decline were the sports shoes on his feet, which presumably help him walk more comfortably.

Much of what the founder of modern Singapore thinks about the big geopolitical issues of the day are well-known.

He doesn’t think that conflict between the US and China is inevitable (China needs the US export market for a good while yet); he doesn’t think that an “Arab Spring” is possible in Asia (there isn’t the vast disparity in wealth and incomes that exist in the Middle East); and Japan risks “dissolving into nothingness” if it continues to refuse taking in migrants to boost its working age population. Read more