Business Commentary for Rational Individuals

Asian Investment Issues: Potential Political Risk

Dr. Bill Belew

Issue IV - July 7, 2006

Introduction by Mr. Stolyarov: Investment in China, India, and Japan may be lucrative, but it carries some definite political risks, writes Dr. Bill Belew. For the benefit of potential investors, Dr. Belew outlines what some of these risks are and how they could affect commerce even indirectly related to Asian countries.

I attended a recent Investment in China and India Summit hosted by Financial Research Associates.  I will use this forum to share some of insights that were given at this summit for the benefit of those hoping/thinking/planning on investing in an Asian country -- China, India, or Japan.

It is difficult to predict the effect of political events on the investment environment. Potential areas of conflict in Asia include:

China and Taiwan - China wants its renegade island back in the fold.

India and Pakistan - historical conflicts.

North and South Korea (and allies) - North Korea is developing a reputation for throwing things.

China and Japan - bad blood since WWII. Watch for it to boil in August.

However, these risks are minimized when put in the context of an overall portfolio.

In addition, major events in any of these areas will affect trade and exports across the world, whether or not one is invested in these countries.

Source: Probitas

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Dr. Bill Belew is a former Intelligence Officer for a Destroyer Squadron. He lived 20 years in Japan, where he started a language school for Japanese ECS. Dr. Belew teaches classes for a vocational school and online for a national university.

See Dr. Belew's blog, PanAsianBiz, for news and discussions about business and current events in Russia and Asia. See ZhongHuaRising for Dr. Belew's reports on business in China, RisingSunofNihon on business in Japan, and TheBizofKnowledge on business education.

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