The danger of global investors giving East Asia the cold shoulder

AN increasingly bizarre ritual of denial and self delusion is being played out in East Asia as countries of the region - Japan, China, South Korea and Russia - engage in war games against each other while behaving as though it's business as usual among neighbours.

The only one among their number that openly admits to its true intentions is North Korea. Pyongyang makes no secret of the fact that it is intent on joining the nuclear weapon club so that it will be taken seriously in Washington and can negotiate on equal terms. If these various nations fool themselves that this kind of brinkmanship is acceptable, it is doubtful whether the outside world will be fooled for much longer. The perception that East Asia is becoming a dangerous place to do business will take hold sooner or later.

If the East Asian situation were transposed, say, to Europe and Asians could see nations there deploying armadas of ships to shadow each other, fighter jets scrambling daily to defend national air space, and politicians railing, they might well conclude that the continent was at war. If they saw US bombers flying low over one nation (South Korea in this case) to threaten another (North Korea), and that nation firing off a barrage of ballistic missiles to demonstrate its nuclear weapon capability, they would surely conclude that Europe was indeed a dangerous place.