Good morning. Here's my take on some of the stories driving the debate in politics, finance and social issues across Asia today:
Fresh China-Japan tensions flare up
Five days on the job in Tokyo and Caroline Kennedy already has an international crisis on her hands. The cause: China's newly announced air defense zone in the East China Sea around disputed islands administered by Japan. Tokyo expressed outrage, followed by the U.S., which drew its own rebuttal from China. Beijing's Defense Ministry filed protests to both nations’ embassies, calling Japan’s remarks “unreasonable” and the U.S. “wrong” for saying China's action was a destabilizing attempt to alter the status quo in the region. Welcome to Asia's troubled waters, Madam Ambassador.
Meet Joko Widodo, who could be Indonesia's next leader
As Susilo Bambang Yudhoyono's second presidential term winds down, voters in Asia's third most populous nation are looking to the governor of Jakarta. Joko Widodo, 52, finds himself mobbed wherever he goes. His steady rise on the national stage may pose an even bigger challenge than Yudhoyono's to the former generals, family dynasties and well-connected tycoons who have dominated Indonesian politics since dictator Suharto’s ouster in 1998. That could be great news for investors who worry Indonesia will slide back into its old, corrupt ways once Yudhoyono heads for the exit in 2014.
Asia's pre-tapering window
As the Federal Reserve delays plans to withdraw its massive stimulus from markets, the Asian Development Bank is offering sage advice: use this window of opportunity to batten down the hatches. "A delay in U.S. bond tapering gives the region a bit of extra time to make sure its economy and financial systems are resilient enough to face the likely market volatility ahead,” says Iwan Azis, head of Manila-based ADB’s office of regional economic integration. This window won't stay open for very long. Asia leaders would be wise to use it while they can.
Bitcoin enjoys a China rally
China is mulling a new way to challenge the U.S. dollar's reserve-currency status: giving its blessing to the controversial digital currency known as Bitcoin. That's not the only reason why Gordon Chang, author of "The Coming Collapse of China," thinks the People’s Bank of China gave a cautious nod to the nascent transactional tool. But in this Forbes piece, he makes an intriguing geopolitical case for China's embrace of Bitcoin, which is on the verge of becoming the world’s first trillion-dollar non-fiat form of money.
Asia's worrisome climate-change concessions
First Japan dropped news it's watering down its target to cut greenhouse gas emissions. Then Chinese and Indian officials headed home from climate talks in Warsaw with concessions that are great news for governments in the short run, but ominous developments for humankind in the long run. Yes, rich nations need to do better. That doesn't excuse the two most populated ones from doing their part. These may look like wins for China and India, but they will only increase friction with other developing nations like the Philippines seeking to step up the fight against climate change.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)