MicroCapitalist Today


This article was written on 05 Jan 2013, and is filled under China.

Bye Bye 2012, Hello 2013

I should begin this post with an explanation of my absence. As many a reader may of gathered, one does not sit on a trust fund and so a (admittedly) long quest for gainful employment had to take place. As befitting of my life, I have wound up in a place where if you told me a year ago I would be there, one would of laughed in disbelief. I am, however, of course grateful and glad to be where I am. For those still wondering and not part of the ‘inner sanctum’, I am working for a boutique financial organisation that does not focus on Asia not too far from ‘Clubland’ in London. Those who are hoping this blog will become a tell-all about such things would be best to look elsewhere (compliance is the word). I would like to take this opportunity to thank my readers and conversation participants, who continue to influence my work extensively.

2012 accomplished much and little in the global geo-political context. North Korea went out with a ‘literal bang’

and ended with a handshake, or should I say Olive Branch?

Japan , China and South Korea tangled each other on Comfort Women and island disputes, yet the arguments appear to of subsided, with the Yasukuni Shrine visiting returnee Shinzo Abe extending invitations for dialogue with South Korea.

In perhaps the biggest kick in the teeth for the Japanese electorate for the year, South Korea elected their first Iron Lady – the slightly controversial but not less able Park Geun-hye returns to the Blue House (being the First Lady back in the 1970s). Rightly or wrongly, Japan and South Korea often compare themselves with each other. In this instance it was a red card for Japan and a slap in the face for their free and democratic society. In Japan’s entire post 1945 history they have struggled to even put women in proper senior Cabinet positions, never mind a Prime Minister.

China of course, welcomed the American war-movie lover Xi Jingping and his pals into the Politburo, despite the best efforts of Bloomberg News. Speculation continues abound as to whether Xi will deliver the market-orientated reforms that the Economist demands he make. Xi, like any international leader will of course be aware of how accurate and altruistic the Economist is…

What of 2013?

Africa the final geo-frontier?

A new proxy seems to be entering in the form of Africa. While Sino-African Trade reached record levels and the China Africa Summit concluded yet another round of interest-free loans, state assistance as well as of course business, South Korea subsequently held its own Korea Africa conference where it boosted financial assistance to US$300 million. Japan has announced plans to assist South Africa with the modernisation of its rail network and will be holding its own Japan-Africa conference. An eye-brow was raised when the Africa Development Bank opened its first office outside Africa – in Tokyo. Considering that the Japanese International Cooperation Agency (JICA) is one of if not the biggest Aid organisation on the planet (yes, I know, I was surprised too) with an even bigger footprint on the continent than the British or the French (even more disturbing), this is perhaps not a surprise. Expect this area to heat up.

To short, profitable diplomatic spats and lots of them

The blessed quartet that is North-East Asia is likely to see even more distress as the island disputes rupture on and internal pressures build regarding the economy. Japan’s QE announcement (it won’t work but that’s for another time) will most likely irritate South Korea, while ‘modernisation’ military wise will no doubt lead presidents in Beijing and Seoul to the mistaken conclusion that Japan wants another crack at the East Asia Co-Prosperity Sphere.

Meanwhile Beijing may dig its heels into the DPRK in the hope of avoiding something truly disastrous from happening (flooding their borders with refugees), while Pyongyang will try and extract as much as it can from its satellite victory. The PRC under Xi is likely going to be forced to ratchet up legal and administrative reforms if only so that they can cope with the high-growth that is required to deliver on promises to improve the lives of the common people. I feel a rebuttal to Bloomberg’s Immortals piece will be necessary at some point as will a review of (so-far) the excellent ‘Mao’s Great Famine’.

International two-faced condemnation of China’s economic and political ascent will doubtless continue, which will silence the constructive collaboration that everyone would gain from. The British mercenary attitude of letting anybody who has money, can come and play is tragically lacking in the international arena. China’s so-far Russian style diplomacy skills will further complicate this.

And, god-willing Western audiences will actually start listening to Korean music other than that of Psy, which will continue to boost their soft-power influence. Mercifully, Monocle24 is already doing this.

With that, I would like to take this opportunity to wishes readers young and old a very Happy and Prosperous New Year.

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