Asia Pacific Track Record

Beijing needs rapid growth to generate employment and reduce the risk of unrest. [...] The recovery this year has been driven by high investment and surging bank credit. Neither is sustainable in the long term. [...] [Chinese] consumption will continue to disappoint as a putative primary engine of growth. [...] Risks to trade from trade conflicts are mounting.

While some sources within the administration suggest that Washington would be content overseeing a 'clean' electoral process and accept any outcome, there are many signals to the contrary. Reports of Karzai appointing loyalists in the electoral commission and in the provincial administrations suggest that he is trying to tilt the process in his favour… US intervention to reduce bias in the electoral process could potentially elicit accusations of interference from the Afghan government and be very destabilising.

While some officials may lose their jobs over perceived failings since [the Uighur riots] this probably would not appease those who want the authorities to take action to ensure their security. Beijing will be particularly concerned to stop anti-government feeling from growing in Xinjiang and to prevent any spill over into other localities where dissatisfaction with the authorities may be high.

Xinjiang is a rising security risk… The overwhelmingly Muslim affiliation of Xinjiang's minority population is the source of secessionist sentiment in the region, and fuels concern in Beijing. [...] Resource and related infrastructure development is increasing China's strategic reliance on the region, raising the level of security risk for Beijing in Xinjiang.

Rural India has been experiencing sustained growth and structural transformation. This will help support the national economy by offsetting the current sharp downturn in urban middle-class employment, property values and consumption.

North Korea has embarked on brinkmanship in a bid to be taken more seriously by the international community. It can be expected to continue trying to pressure Washington, in particular, to engage with it on its terms.

China's emerging blue water capability is requiring others to consider how the strategic balances of the world's armed forces might be affected… As China's economic and strategic interests becomes increasingly global, the Chinese navy will be spearheading the military's push for more resources to build up its power projection capabilities to be able to defend these interests.

The existence of different parties holding power in Islamabad and Lahore has created great tension… If relations between PPP and PML-N deteriorate, a tussle for power could emerge between rival powers in Islamabad and Lahore, with serious consequences for stability.

The open frontiers of India's cities will keep them vulnerable making them difficult to defend against random attack.

Investors confront a number of problems... New plants [may] serve as focal points for protest movements.