Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
The Bernanke Effect reaches Mongolia
When worries about the Federal Reserve ending its quantitative easing program are rampant in far-off Mongolia, you know the developing world has problems. Mongolia's currency, the tugrik, is down 15 percent since June 30, meaning it's barely doing better than the battered monetary units of Syria and Iran. While falling coal revenues get some of blame for Mongolia's woes, the main culprit is a Fed about to pull the rug out from under the developing world. For Asia's smallest economies, the Fed's two-day policy making beginning Wednesday can't end soon enough.
Are India's rate-hiking days over?
In the waning days of his leadership of the Reserve Bank of India, Duvvuri Subbarao raised two of the nation's interest rates and curbed daily funding support for lenders in order to halt the rupee's slide. Two weeks into the job, Subbarao's successor, Raghuram Rajan, may be on the verge of reversing those tightening measures. Doing so would be a sign of confidence that India's crisis-wracked economy is stabilizing. We'll know for sure on Sept. 20, when Rajan oversees his first policy meeting. For now, though, India's markets are basking in a rare bit of optimism.
Expect a tug-of-war over Australia's economy
As Tony Abbott begins his stint at Australian prime minister today, he leaves little doubt who's really in charge: Glenn Stevens. Abbott pledges to support economic growth while also trimming government debt. That puts the onus on central bank Governor Stevens to manage downside risks as China slows. It's not a given, though, that Stevens will be willing to do Abbott's job for him. Expect a high-stakes tug of war over who bears this heavy burden as weak global trends close in on a nation that nimbly avoided recession in recent years.
Hong Kong's existential Shanghai problem
The day Hong Kong has long dreaded is here as Shanghai moves to set up a free-trade zone that may provide an alternative financial gateway into China. That's long been Hong Kong's exclusive role: What happens when Beijing cuts out the middleman and incentivizes corporate executives and investors to interact with China directly? The city had better raise its competitiveness and fast, says Hong Kong billionaire Li Ka-shing, Asia’s richest man. The former British colony, which for years has sat at the center of any economic map of Asia, is at risk of losing its pivotal place in the Asian Century.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)