BEIJING // Even though Barack Obama's tour of Asia is not taking him to China, it will be high on the agenda in the four countries the US president is visiting.
Recent disputes between China and its neighbours have heightened tensions in the region, and many Asian leaders will be looking to Washington to act as a counterweight to Beijing.
The issues other Asian countries have with China are varied. Among them, India has reservations over Beijing's closeness to Pakistan, including its support for Islamabad's nuclear programme. South Korea is concerned with China's defence of North Korea and opposition to joint military exercises with the United States, while relations with Japan nosedived in a dispute over islands in the East China Sea.
What links the concerns, and those of many countries in South East Asia, is a perception that China is acting ever more like a regional superpower. This assertiveness, analysts have said, is pushing China's neighbours such as Japan, South Korea and Vietnam, towards the US.
However, analysts said Mr Obama, while striving to take a tough line with Beijing, must be careful to avoid alienating China, as continued economic and political engagement is vital, especially as tension over the value of the yuan and its effect on US manufacturing remains unresolved.
Although he is not visiting China, Mr Obama is expected to hold talks with the Chinese president, Hu Jintao, on Thursday at the G20 summit in Seoul.
On his four stops, Mr Obama will take with him "a message of reassurance that some kind of balance of power is still in play" in the region, according to Alan Chong, an associate professor in the S Rajaratnam School of International Studies in Singapore's Nanyang Technological University.
"It doesn't necessarily mean that some kind of Cold War-era military containment is in motion as part of the US strategy, but a hint of some form of power balance would be conveyed. That's a given," he said.
Mr Obama faces a balancing act, said Jonathan London, an assistant professor in the department of Asian and international studies at the City University of Hong Kong. Washington must maintain stability in its relationship with Beijing, he said, while responding to domestic and international pressures to take a tough line.
"It's clear the two countries need each other but there's a need for Obama to appeal to domestic constituencies and address concerns about the low valuation of the yuan and … with respect to international strategy, to somehow project politics of firmness towards China," he said.
South Korea also is on a tightrope because, while it would like to trumpet the US-Korea relationship, it must be mindful not to appear to side with the Americans against the Chinese, said Mr Chong.
"South Korea's case is delicate because Seoul cannot afford to alienate Beijing because of its unique diplomatic connection to Pyongyang," he said.
The recent dispute between China and Japan over the detention of a Chinese fisherman, after his boat rammed two Japanese coastguard vessels near the disputed East China Sea islands, has severely strained the relations between Beijing and Tokyo. As a result, said Mr Chong, "the Japanese would have no qualms about appearing to side with the Americans against China".
Indonesia could also benefit from continued US engagement in the region should it develop territorial disputes with China, which could happen if Beijing extended the geographical scope of its claims, according to Mr Chong. China's claims over the South China Sea conflict with those of the Philippines, Taiwan, Vietnam, Malaysia and Brunei.
Overall, Mr Chong said, Beijing might be asking itself if it has over-reached over the past year by taking what many commentators have seen as an overly aggressive stance with nearby countries.
As well as having disputes with some neighbours, China has reacted angrily to recent American efforts to engage in the region. Last week, Beijing dismissed an offer from Hillary Clinton, the US secretary of state, to host trilateral talks on resolving disputes with Japan. American offers to help set up an international process to solve disputes in the South China Sea were also given short shrift by China.
However, before Mr Obama's visit, Mrs Clinton insisted Washington was not looking to gain the upper hand in the region and insisted "it's not in anyone's interest" for the two countries to view one another as adversaries.
dbardsley@thenational.ae
THE BIO
BIO:
Born in RAK on December 9, 1983
Lives in Abu Dhabi with her family
She graduated from Emirates University in 2007 with a BA in architectural engineering
Her motto in life is her grandmother’s saying “That who created you will not have you get lost”
Her ambition is to spread UAE’s culture of love and acceptance through serving coffee, the country’s traditional coffee in particular.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Mohammed bin Zayed Majlis
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
THE BIO
Favourite holiday destination: Whenever I have any free time I always go back to see my family in Caltra, Galway, it’s the only place I can properly relax.
Favourite film: The Way, starring Martin Sheen. It’s about the Camino de Santiago walk from France to Spain.
Personal motto: If something’s meant for you it won’t pass you by.
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Like a Fading Shadow
Antonio Muñoz Molina
Translated from the Spanish by Camilo A. Ramirez
Tuskar Rock Press (pp. 310)
RACE CARD
5pm: Maiden (PA) Dh80,000 1,400m
5.30pm: Maiden (PA) Dh80,000 1,200m
6pm: Arabian Triple Crown Round-1 (PA) Listed Dh230,000 1,600m
6.30pm: HH The President’s Cup (PA) Group 1 Dh2.5million 2,200m
7pm: HH The President’s Cup (TB) Listed Dh380,000 1,400m
7.30pm: Wathba Stallions Cup (PA) Handicap Dh70,000 1,200m.
Profile
Company: Libra Project
Based: Masdar City, ADGM, London and Delaware
Launch year: 2017
Size: A team of 12 with six employed full-time
Sector: Renewable energy
Funding: $500,000 in Series A funding from family and friends in 2018. A Series B round looking to raise $1.5m is now live.
The biog
DOB: 25/12/92
Marital status: Single
Education: Post-graduate diploma in UAE Diplomacy and External Affairs at the Emirates Diplomatic Academy in Abu Dhabi
Hobbies: I love fencing, I used to fence at the MK Fencing Academy but I want to start again. I also love reading and writing
Lifelong goal: My dream is to be a state minister
The Matrix Resurrections
Director: Lana Wachowski
Stars: Keanu Reeves, Carrie-Anne Moss, Jessica Henwick
Rating:****
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
THE SPECS
Engine: 1.5-litre
Transmission: 6-speed automatic
Power: 110 horsepower
Torque: 147Nm
Price: From Dh59,700
On sale: now
if you go
The flights
Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.
The hotels
Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.
When to visit
March-May and September-November
Visas
Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.
