FX fundamental analysis SO WHERE ARE WE NOW?
So, elections have passed and transitions have taken place but the drum is still beating. What gives? It could well be the case that once you let the cat out of the bag, it takes careful and delicate negotiation to get it back in. Asian culture is steeped in concepts of
honour and pride. Aſter the
Chinese Government stoked the mob protests which led to the blockading of Japanese products and the violent targeting of Japanese
businesses,
The Senkaku/Diaoyu Islands disputes look to be just one part of a larger and more complex game of chess in the region
but with increasing numbers of students
studying and working
abroad, ‘Chinese walls’ are being torn down. Further, a generation of increasingly innovative developers is able to stay one step ahead of state censors in a perpetual game of cat and mouse.
While frustrations are often felt at
the corruption of the lower
level local officials, claims in publications such as The New York Times and The Economist, that former Premier Wen Jiabao’s family have amassed billions of dollars in recent years was met with stern, but not complete censorship. Further, in 2012 Bo Xilai, son of one of the Eight Elders of the Chinese
18 FX TRADER MAGAZINE April - June 2013
Communist Party and once hotly tipped to become President, became embroiled in a scandal involving the murder of a British businessman and a host of questionable financial arrangements. With both the past and future of the Politburo leadership showing questionable ethical
characteristics, it is
understandable that questions, no matter how censored, start to circulate. Against such a backdrop, the distraction of nationalistic rabble rousing could be quite appealing.
손바닥으로 하늘을 가리려한다 - Don’t try to cover the whole sky with the palm of your hand Korean proverb
exports to China (20% of exports) plunged, thus pushing Japan towards recession and it became politically impossible for an incoming Japanese leader to appear to let the issue lie. Conversely, a new administration has taken over in China and as the new leaders of the world’s up-and-coming superpower, they cannot appear to be dictated to by a fading old enemy. They say that pride comes before a fall, and it is not that outlandish to assume that on this issue at least, both Japanese and Chinese tanks are currently running on pride.
Outside factors too are most certainly playing a role. The US and many of its regional allies are keen to prevent Chinese aims of a unipolar Asia. Further, recent US support for Japan on the issue may have irked Beijing but encouraged them to step back. A likely consideration is that the US position is also being made in reaction to China’s stance over Syria. Furthermore, there have been reports in German newspaper Spiegel that North Korea is taking
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