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US-Asia Power Shift

WSJ: Western companies fail to compete. Telegraph: London squanders its advantage in financial services. FT: Suicide controversy deeply impacts China.

 China applies trade leverage in its sovereignty disputes

Michael Richardson, a visiting senior research fellow at the Institute of South East Asian Studies in Singapore, writes in the Japan Times that China is making nations recognize its sovereignty claims if they want to trade with the growing power. Asian nations have become increasingly dependent on the Chinese market for their exports, and this gives China trade leverage that it can use for other purposes.

QUOTE: Given Beijing's readiness to apply trade leverage in its sovereignty disputes, ASEAN policymakers will be watching closely to see whether China's economic embrace of Southeast Asia leads to a squeeze rather than a hug in the South China Sea dispute.

Western companies fail to compete

Christopher Stephens, a Hong Kong-based senior partner with Orrick, Herrington and Sutcliffe, writes in the Wall Street Journal that Western companies have had a difficult time competing in the Asian electrification and nuclear energy market. Despite their historical advantages, Western companies have struggled to keep up with competitors.

QUOTE: The enormous extent of their home-schooling enables companies in these countries to bring a formidable domestic experience to bear in international markets. American companies lack that opportunity, forcing them to innovate on new technologies abroad at the same time that they have to navigate a web of foreign tax and regulatory policies.

London squanders its advantage in financial services

Mark Field, MP for the Cities of London & Westminster, writes in the Daily Telegraph that London has enormous advantage in the field of financial services, but the city is undoing this with unnecessary regulations.

QUOTE: Steadily and determinedly, London’s rivals are gaining ground. All manner of companies are hedging their bets by choosing other, more welcoming global financial centers as their locations for future growth.

Suicide controversy deeply impacts China

Columnist David Pilling writes in the Financial Times that the Foxconn controversy in which workers were allegedly committing suicide has changed the labor landscape in China. The controversy led to a 20 – 30 percent rise in wages at factories across the country and a greater tolerance by Chinese authorities for unions.

QUOTE: Not only will it mark the end of an era of dirt-cheap labor, [Victor Fung, chairman of Li & Fung, a supplier of Walmart and the world’s biggest sourcing company] predicts, but it will also trigger a rethink of the entire factory-town system on which 30 years of Chinese economic growth has been built.

America and Asia must adjust to global power shift

Former East Asia chief correspondent Takashi Oka writes in the Christian Science Monitor that global power has shifted, and India and China are now crucial for global economic recovery. The United States must learn how to thrive as a member of the international team.

QUOTE: Today China and India loom over the rest of the world as very much their own masters – in fact, as manufacturers of essential goods, from cars to computer chips, who might conceivably rescue their Western partners from joblessness and stagnant economies.

Obama puts his weight behind arms-control treaty

Journalist Fred Kaplan writes in Slate that President Obama is putting all of his effort into getting Senate ratification of the arms-control treaty between America and Russia. His administration argues that the treaty is essential for national security.

QUOTE:The administration is doubling down, pushing full steam ahead for a vote on ratification during the lame duck session.

Why India is crucial to Myanmar’s future

Timothy Garton Ash, a senior fellow at the Hoover Institution and professor of European studies at Oxford University, writes in the Los Angeles Times that India must change its policies and help Myanmar’s democracy movement. India is the only country that can rebalance the forces in the region as the Burmese junta’s generals will always be able to rely on spineless China and on trade-hungry ASEAN.

QUOTE: Whether India can come up with a new Burma policy worthy of its own traditions and values, as well as its legitimate interests, is a vital question for the future of Suu Kyi's martyred land. It is also important for the shape of the post-Western world.   

US Federal Reserve must stay focused on price stability

Karen Dynan, vice-president of economic studies at the Brookings Institution and an ex-Federal Reserve official, and Donald Kohn, former vice-chair of the Fed and a Brookings senior fellow, write in the Financial Times that the US Federal Reserve must keep its focus on price stability in order to avoid a prolonged drop in the dollar.

QUOTE: Pro-growth policies must be undertaken everywhere in the context of price stability, with emphasis on shifting the composition of demand away from domestic sources in many current account deficit countries and towards domestic sources in many surplus countries.

There is now a greater need for Russia and NATO to re-set relations

Adam Daniel Rotfeld, former Polish Minister of Foreign Affairs, writes in Project Syndicate that now is the time for NATO and Russia to re-set relations. Both must stop viewing each other as adversaries and work to be more inclusive and cooperative.  

QUOTE: The revived importance of multilateral security institutions is creating a new climate and new prospects for a security system that can meet the needs of the twenty-first century.

America’s income inequality becomes drastically worse

Columnist Nicholas Kristof writes in the New York Times that while so-called “banana republic” nations like Argentina have greatly reduced their income inequality, the gap in the United States has gotten worse. Now 1 percent of Americans earn almost a quarter of the nation’s income.

QUOTE: At a time of such stunning inequality, should Congress put priority on spending $700 billion on extending the Bush tax cuts to those with incomes above $250,000 a year? Or should it extend unemployment benefits for Americans who otherwise will lose them beginning next month?