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Turmoil in Asia could drive capital to markets in U.S.

By Ira Zunin

POSTED: 01:30 a.m. HST, Jul 12, 2014

~~<p>As the United States began downsizing its military and Vladi&shy;mir Putin's Russia swallowed the Crimea with only nominal opposition from the West, China has decidedly toughened its stance in the China Sea. In alignment with the American &quot;pivot to Asia,&quot; Japan's military resources are beginning to uncloak. The possibility of a near-term skirmish between China and Japan is real. Neither nation is angling for a large-scale confrontation, but leaders of both countries are aware of potential benefits from nationalist sentiments generated by a show of force. A substantial confrontation, or even a public belief that one is imminent, will result in the flight of capital from Asia, especially to U.S. markets, particularly in the energy, technology and property sectors, and possibly even health care.</p>
<p>Flexing its muscles, China in November declared a new air defense zone around tiny disputed islands called Diaoyu in China and Senkaku in Japan. The prize is not so much the tiny, uninhabited, rocky formations, but control over some of the busiest shipping lanes in the world and natural resources, especially oil, in the East and South China Sea.</p>
~~

As the United States began downsizing its military and Vladi­mir Putin's Russia swallowed the Crimea with only nominal opposition from the West, China has decidedly toughened its stance in the China Sea. In alignment with the American "pivot to Asia," Japan's military resources are beginning to uncloak. The possibility of a near-term skirmish between China and Japan is real. Neither nation is angling for a large-scale confrontation, but leaders of both countries are aware of potential benefits from nationalist sentiments generated by a show of force. A substantial confrontation, or even a public belief that one is imminent, will result in the flight of capital from Asia, especially to U.S. markets, particularly in the energy, technology and property sectors, and possibly even health care.

Flexing its muscles, China in November declared a new air defense zone around tiny disputed islands called Diaoyu in China and Senkaku in Japan. The prize is not so much the tiny, uninhabited, rocky formations, but control over some of the busiest shipping lanes in the world and natural resources, especially oil, in the East and South China Sea. Login for more...



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