These are interesting times to be in Asia, with economics taking a back seat to security. I was in Tokyo Saturday when the Japanese parliament overcame fist fights and protests to alter 70 years of pacifist policies. Then I flew to Seoul, where government officials expressed concerns about Japan’s change, even though it is partly designed to provide assistance to the U.S. in the event of a North Korean invasion of the South. Also in the news: the Philippines is debating the return of the U.S. Navy.
At home it’s clear cyber security, not economics, will dominate Obama’s talks with Xi Jinping (some progress on that front reported here). Meanwhile the would-be leader of the opposition, whose anti-China bombast shows no sign of abating, has recommended the President cancel his state dinner and buy President Xi a hamburger instead.
History suggests periods of hegemonic change, like the one we are now living through, often lead to war. Will this time be different? Evan Osnos, one of the most astute journalistic observers of China, provides the compelling reason why it might: trade between China and the U.S. has grown from $2 billion in 1979 to $592 billion last year. But it is still hard to imagine how the world makes it through this touchy transition without some rough patches.
On Wednesday in Hong Kong, I’ve been invited by the Asia Society to debate the motion: “RESOLVED: The American Century will give way to the Asian Century on or before the year 2041.” Which side would you take? Send me your thoughts by email.
More news below.
• Dimon weighs in on CEOs as president
Over the weekend, JPMorgan CEO Jamie Dimon was asked if corporate leaders have the skills required to serve in political positions. While Dimon said some attributes are good, like “knowing how to run things, knowing how to get good people involved,” those skills aren’t sufficient. Dimon’s comments come as one CEO, Donald Trump, and another former CEO, Hewlett-Packard Carly Fiorina, are leading Republican polls.
• The crisis at Volkswagen
Volkswagen CEO Martin Winterkorn on Sunday apologized about his company’s decision to install technology in U.S. cars so they would falsely pass emissions exams. The automaker faces billions of dollars in fines and a crisis at the top of the company’s management following charges it faked pollution tests for some Audi and VW cars since 2009.
• Alibaba lockup period ends
The lockup of 63% of Alibaba’s shares ended over the weekend, freeing up the biggest shareholders to start selling their stock on Monday if they opt to do so. It will be interesting to see how well Alibaba performs on Monday, especially considering the fact that the stock has been badly battered in the months after an IPO that was considered a success when it was launched. Some key insiders like billionaire founder Jack Ma have pledged to keep their stock, but Yahoo – with a 15% stake – is the largest investor that hasn’t promised to keep its holding.
• Atmel acquired for $4.6 billion
Chipmaker Dialog Semiconductor has agreed to buy U.S. peer Atmel in a deal that will help diversify the acquirer’s client base in automotive markets as well as network-connected chips used in industrial gear, also known as the “Internet of Things.” Dialog, which is heavily exposed to Apple and Samsung, had been on the hunt since merger talks with another peer broke off last year. Semiconductor M&A has had its biggest year since 2000, Thomson Reuters data shows.
• Apple’s China apps hacked
Apple is taking steps to address counterfeit software that has resulted in a security breach for the company’s App Store, where some of the most popular Chinese names were found to be infected with malicious software. One cybersecurity firm said the attack affected more than three dozen apps. The apps were reportedly infected after software developers were lured into using an unauthorized and compromised version of Apple’s developer tool kit.
WSJ (subscription required)
Around the Water Cooler
• Drug cost spikes lead to ire
Much of the media attention about high drug price costs has focused on newer treatments for diseases like cancer and hepatitis C. But there is also a trend of huge price increases on older drugs, pressuring private insurers, Medicare and hospitalized patients. Take the example of Daraprim, a 62-year-old drug that used to sell for $13.50 but now costs $750 after a start-up bought the treatment and immediately hiked up the price. The annual cost to treat some patients is now hundreds of thousands of dollars.
New York Times (subscription required)
• GM CEO joins Twitter movement
Female actresses have in recent years lamented the vapid questions they are asked on the red carpet – often about what they are wearing and not the projects they are working on – while men generally aren’t asked as many questions about their appearance. A new hashtag, #SmartGirlsAsk, was floated for the Primetime Emmy Awards, suggesting more thoughtful questions when interviewers chat with Emmy attendees. GM CEO Mary Barra, Fortune’s Most Powerful Woman of 2015, asked the following question: “If you could build or invent anything, what would it be?”
• McDonald’s ignores BK overture
A marketing battle between McDonald’s and Burger King took a new turn over the weekend. Initially, Burger King has proposed the companies join forces and create a “McWhopper” (a cross between the Big Mac and Whopper) to promote Peace Day. McDonald’s didn’t take the bait. On Sunday, McDonald’s executives are now saying they are leading an ad campaign to promote the United Nations World Food Programme and benefit refugees of conflicts in the Middle East.
5 things to know this week
Pope, Greek election, and Nike’s earnings — 5 things to know this week. Today’s story can be found here.