Friday Asia Update: Top Five Stories for the Week of October 4, 2013

Will Piekos and Sharone Tobias look at the top five stories in Asia this week.

1. Obama cancels Asia trip. U.S. President Barack Obama canceled a four-country tour of Asia, including Indonesia, Brunei, Malaysia, and the Philippines, in which he would have attended meetings of the Asia-Pacific Economic Cooperation in Indonesia and the Association of Southeast Asian Nations in Brunei. The travel was canceled because of the U.S. government shutdown. Analysts say that canceling the Asia trip, after Obama had previously committed to attending these summits every year, could deal a blow to the administration’s pivot to Asia. Secretary of State John Kerry will lead the U.S. delegation instead.

2. Hagel tries to reaffirm ties during trip to Asia. After only seven months as secretary of defense, Chuck Hagel traveled to Asia for the third time, hoping to prove that the administration’s rebalance towards Asia is a priority. Hagel first spent four days in South Korea, the longest visit by a U.S. defense minister in decades, where he discussed plans for a South Korean takeover of operational command of its own troops by 2015. On Wednesday, Hagel and Secretary of State John Kerry traveled to Japan to sign an agreement calling for construction of a new missile-defense radar system, deployment of drone aircraft, and joint efforts to combat cyber threats in Japan on Thursday. Leaders of the two countries also discussed possible responses to China sending Coast Guard ships to contest Japan’s control of the Senkaku/Diaoyu island chain in the South China Sea. While the United States does not officially take a position on the issue, Hagel repeated that the islands were covered by the security treaty that obligates the United States to defend Japan if it is attacked.

3. Shanghai Free Trade (and Free Speech?) Zone opens. China opened a new free trade zone in Shanghai on Sunday, which will allow banks and other businesses within the city to experiment with loosened regulations. An article in the South China Morning Post claimed that certain banned websites, such as Facebook and Twitter, will be accessible within the zone. Chinese state media summarily denied this claim [Chinese], but later admitted that certain foreign websites will be granted “special permissions.” Few details have been released about the specifics of the zone, but real estate values in Shanghai have already skyrocketed as a result of the announcement in July. Many analysts have drawn comparisons to Deng Xiaoping’s creation of the Shenzhen Special Economic Zone, which first brought capitalism to China thirty-three years ago.

4. Asian Development Bank cuts growth forecasts. Estimates of slowed growth in India and China and concerns over the possible reduction of U.S. stimulus measures led the ADB to cut its 2013 growth forecast for developing Asia. The bank has lowered its estimate to 6 percent, down from its April estimate of 6.6 percent. Predictions for growth in China and India dropped to 7.6 percent and 4.7 percent in 2013, respectively, from 7.7 percent and 6 percent. The ADB stated that the slowing growth in regional economies “highlights the need to push ahead with overdue reforms in areas like foreign direct investment, infrastructure development, fiscal consolidation and social protection programs.”

5. Riots return to Burma’s troubled Rakhine state. Burmese president Thein Sein travelled to the western state of Rakhine this week, following the death of an elderly Muslim woman and the burning of scores of homes in a fresh spate of sectarian violence. The incident in Thandwe reportedly started over an argument between a Buddhist and a Muslim over a parking space for a motorcycle. Clashes have been ongoing since June 2012; and more than 240 people have been killed and 140,000 have been forced from their homes, most of them Muslims.

Bonus: “A Touch of Sin” opens in New York. Chinese director Jia Zhangke’s latest film, “A Touch of Sin,” will open in New York on Friday. The film follows four narratives, each of them dealing with a working-class character forced to the brink of violence by unjust circumstances. It won best screenplay at Cannes and has been shown this week at the New York Film Festival.