Leading Indicators: Off-the-Radar News Roundup

Judah Grunstein

- China's central bank promised to maintain a "basically stable" exchange rate and a "moderately easy" monetary policy, in its first-quarter report released yesterday. The language has some analysts expecting an imminent shift toward a stronger yuan. Meanwhile, China posted double-digit trade growth in April, and first-quarter economic growth of 11.9 percent, but weak global demand has analysts skeptical that Beijing will move quickly to let the yuan rise. Got that? It would seem the only safe bet is that China will do something about the yuan, as long as you accept that "doing nothing" also qualifies as "doing something."

- China and Cambodia agreed to strengthen bilateral military ties following a meeting in Beijing between China's defense minister and Cambodia's chief of staff. Nothing new here, Cambodia has been steadily slipping into China's orbit for a while now.

- Just when you thought that Japanese Prime Minister Yukio Hatoyama's handling of the Futenma base relocation couldn't get any worse, government sources said that he has now given up on his self-imposed deadline to resolve the issue by May 31. No Coke!! Pepsi!!

- South Korea confirmed that a Pakistani man arrested for illegally entering the country is a member of the Taliban, raising security concerns for the G-20 summit scheduled in Seoul for November. The more globalization diffuses power -- and the symbols of power -- the more it diffuses the threat of anti-globalization backlashes, like Islamic terrorism.

- Meanwhile, and perhaps not unrelatedly, South Korea formally launched the 320-troop unit that will be deployed to Afghanistan in July and outlined its equipment: four helicopters, armored vehicles and a mini-UAV.

- India's army said that there had been no "intrusions" by China along the Line of Actual Control that defines their border, instead calling various incidents reported last year "transgressions" that resulted from "a matter of perception of the borderline."

- India's home minister ruled out military operations against Maoist Naxalite insurgents due to "ethical considerations," saying, "Sri Lanka might have used the military to tackle the LTTE, but we in India can't do that." Interesting that he referred to Sri Lanka, instead of to the Pakistani army's campaign in North Waziristan. Perhaps it has to do with not stepping on Islamabad's toes in advance of the July 15 meeting between the two countries' foreign ministers, announced today.

- Following a meeting with Turkish Foreign Minister Ahmet Davutoglu, Spain's foreign minister promised that the EU would open an unspecified number of new chapters in Turkey's EU accession negotiations before the end of the Spanish EU presidency in July. I'm not quite sure what the Spanish foreign minister is doing speaking on behalf of the EU on common foreign policy, given that there's now an EU foreign minister -- a role that was created for that express purpose.

- Russia's President Dmitry Medvedev met with Hamas leader Khaled Mashaal during his visit to Syria. The two were joined by Syrian President Bashar al-Assad. This will probably raise hackles in all the usual places, but I think it's worthwhile having someone of Medvedev's stature able to sit down and cut to the chase with Hamas leaders. French President Nicolas Sarkozy has been trying to do just that for a while, but faces constraints based on both the U.S. and EU listings of Hamas as a terrorist organization.

- Israel was invited to join the OECD after a 16-year effort. The bid was supported by Turkey over strenuous Palestinian opposition, signaling a potential thaw in recently testy relations between the two allies.

- Egypt's prime minister asked parliament to extend the Emergency Law, in force since 1981, for another two years,a lthough promising to limit certain aspects of it. The lifting of the state of emergency has been a prominent demand of the Egyptian opposition. The extension, which parliament is expected to approve, is meant to be the last before an anti-terror law replaces it in 2012.

- Uruguay's local elections, which saw the opposition take most of the regional governments amid a record proportion of "blank ballot" abstensions, served as a "wake-up call" for the country's ruling coalition.

Research by Kari Lipschutz.