Warning signs of war in Korea. Despite being already the main object of interest (and anxiety) in the Asian economic as well as political set, the unscrupulous leader Kim Jong Un has decided to push the limit a bit further. Indeed, in the last days North Korea disclosed the development of a sophisticated brand new launcher for missiles, unaware of the latest announcement by the United States Secretary of State Rex Tillerson who declared in Seoul that “strategic patience” is over towards these unjustified acts of force. Obama’s policies are no longer welcome in the Trump’s era.
A senior US official in Washington confirmed in the previous weeks that the Trump administration is contemplating extensive sanctions in the context of a wide review of measures to drive back North Korea’s missile and nuclear threat. Nonetheless, the deputy ambassador at the DPRK (North Korean) mission to the United Nations in Geneva, Choe Myong-Nam, showed fierce and self-confidence when being interviewed by Reuters:
A senior US official in Washington confirmed in the previous weeks that the Trump administration is contemplating extensive sanctions in the context of a wide review of measures to drive back North Korea’s missile and nuclear threat. Nonetheless, the deputy ambassador at the DPRK (North Korean) mission to the United Nations in Geneva, Choe Myong-Nam, showed fierce and self-confidence when being interviewed by Reuters:
“Even prohibition of the international transactions system, the global financial system, this kind of thing is part of their system that will not frighten us or make any difference.“
As a matter of fact, the nuclear empowerment pursued by the asiatic leader seems nothing but a threaten against USA and South Korea. The latter suffering from a chaotic political situation, with the president Park Geun-Hye discharged by the local Constitutional Court as a consequence of several accusations including leaking government information, abuse of power and bribery.
The question now is: do markets believe in the possibility of an incoming war? Maybe. But looking at asian indexes it seems not. The Seoul stock exchange KOSPI reached its maximum level, considering the last two years, just after Rex Tillerson’s warnings about the rising tension in Korea. And the result is extremely surprising if we also take into account the Chinese anger due to the installation on the korean soil of the highly technological american system ‘anti missiles’, seen as something aggressive rather than pure defense.
However, it is up to Trump’s potential future measures. United States desertion of the Trans-Pacific Partnership certainly obstructs the process of growth of the eastern economies, and an eventual stiffening of protectionist policies against emerging asian markets would probably have a significant impact on the level of investments and globalization of these countries. But still investors rely on the persistent and relentless development of Asia, as well as on the restructuring policies of rising entities such as Taiwan and Korea. Ironically, Trump’s excessive protectionism could make way for the global expansion of Japan and China, the latter bound to become a key player in the global financial setting thanks to the progressive reduction of private debt and parallel transition towards a market economy.
Luca Landi
The question now is: do markets believe in the possibility of an incoming war? Maybe. But looking at asian indexes it seems not. The Seoul stock exchange KOSPI reached its maximum level, considering the last two years, just after Rex Tillerson’s warnings about the rising tension in Korea. And the result is extremely surprising if we also take into account the Chinese anger due to the installation on the korean soil of the highly technological american system ‘anti missiles’, seen as something aggressive rather than pure defense.
However, it is up to Trump’s potential future measures. United States desertion of the Trans-Pacific Partnership certainly obstructs the process of growth of the eastern economies, and an eventual stiffening of protectionist policies against emerging asian markets would probably have a significant impact on the level of investments and globalization of these countries. But still investors rely on the persistent and relentless development of Asia, as well as on the restructuring policies of rising entities such as Taiwan and Korea. Ironically, Trump’s excessive protectionism could make way for the global expansion of Japan and China, the latter bound to become a key player in the global financial setting thanks to the progressive reduction of private debt and parallel transition towards a market economy.
Luca Landi