Asia's Future: The 25 Best Stories
September 10, 2001
A sampling of summaries and snippets of 25 top articles from The Asian Wall Street Journal's first quarter century
1. Distress and Deregulation Weaken Japanese Trade Barriers
Once, Japan's trade deficit with the U.S. was the center of a bitter political controversy. No more. This thoughtful overview of how that change happened explains the way Japan's economic weakness over the last decade allowed big foreign companies to make unprecedented inroads into the country's long-closed markets.
"Japan's 'lost decade,' as many here call the past 10 years of economic stagnation, has been more than just another recession. The resulting distress, coupled with deregulation and diplomatic pressures, have opened up the Japanese economy to foreigners to an extent almost no one foresaw even five years ago. Remarkably, the biggest openings have come in sectors that U.S. trade negotiators deemed the most politically explosive - such as cars, electronics and finance."
--By Phred Dvorak, Robert Guth, Peter Landers and Todd Zaun, January 2, 2001
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2. Political Conflict Cleaves Malaysia's Old Power Pair
Prime Minister Mahathir Mohamad's split with his former deputy Anwar Ibrahim became a defining moment in Malaysian politics. This Journal story offered one of the best accounts of how these two allies fell out.
"Datuk Seri Anwar was undeterred. Rather than backing off, he simply denied the poison-pen letter allegations and fought to take command of economic strategy. Instead of coming around to Dr. Mahathir's views on the need to reinflate -- not squeeze -- the economy, he argued daily with the prime minister thoughout late 1997, seeking to persuade Dr. Mahathir to drop his criticisims of foreign-currency speculators and adopt International Monetary Fund-style policies of tight spending and high interest rates. That way, Datuk Seri Anwar argued, Malaysia's ringgit would strenghten."
--By Ian Johnson, November 2, 1999
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3. Ms. Chen Believed Falun Gong a Right -- to Her Last Day
After Chinese security officials tortured and killed an unassuming auto-parts retiree named Chen Zixiu, they took numerous precautions to ensure the details of her death wouldn't become public. Their best efforts, though, failed to stop Ian Johnson from uncovering the truth about Ms. Chen's final days. This story and others on China's treatment of the Falun Gong movement later won Ian the Pulitzer Prize.
"People such as Ms. Chen are at the forefront of a slow trend to demand the freedoms guaranteed by China's laws and constitution. While many Falun Gong practioners have compromised -- by practicing at home, for example -- thousands have insisted openly on their right to freedom of belief and assembly. 'We're good people,' Ms. Chen's friends recall her telling officials from the Weifang city government who interrogated her in her barren concrete cell two days before she died. 'Why shouldn't we practice what we want?' "
--By Ian Johnson, April 24, 2000
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4. Downfall of Alphatec Shows the Economic Rot in Thailand
Alphatec was once Thailand's pre-eminent high-tech company, until bad debts and accounting irregularities laid it low. This inside tale of how Alphatec collapsed illustrated the fatal weaknesses that lurked among some of Asia's brightest corporate names, and that, by mid-1997, helped bring about the financial crisis that swept across Asia.
"Alphatec now stands as an object lesson in the dangers of doing business in a country where management accountability is spotty at best. The stark absence of corporate controls at Alphatec -- the mingling of funds among listed and closely held companies run by the same family, the use of multiple sets of accounting books and misleading accounting methods, the highly paid, rubber-stamp board -- mirrors the problems at other Thai companies that have brought this country's economy to the brink of collapse."
--By Peter Waldman and Paul M. Sherer, September 9, 1997
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5. Kwangju's Jobless Face Uphill Trek in Battle Against Unemployment
In late 1997, as South Korea went into economic crisis, we examined the devastating impact on this once thriving economy. Our reporter sought out real people, and let them tell the story behind the story of layoffs. Every day the chief subject of this piece put on a clean white oxford shirt and black leather shoes, boarded a bus, then hiked into the hills above Kwangju until it was time to go home.
"Sometimes I think all hope is gone," moans Roh Sang Yon, a 39-year-old Asia Motors production manager. At a tiny bar just over the wall from the company's blue-roofed factory, Mr. Roh sits cross-legged on a tatami mat, dining on pungent Korean sausage and deceptively mild soju, a potato-based alcohol. He dismisses forecasts for an early recovery. "To put it quite honestly," he says, " 'our company never had an economic mind. We just copied everything from the Japanese. Now we are paying the price."
--By Joseph Kahn, Dec. 12, 1997
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6. Collapse of Baring Is Work of an Institution
Nicholas W. Leeson, a trader with Barings Securities in Singapore, amassed US$1.39 billion in losses from trading in Japanese equities derivatives in early 1997. The losses caused Barings' collapse and led to the bank's acquisition that March by ING Group. But Journal reporters dug beneath the surface to investigate the deeper, internal rot that brought about the venerable British investment bank's collapse.
"What is emerging -- from documents and from interviews with current and former Barings executives -- is a fatally flawed organization: one that ignored at least several warning signs, going back not just weeks and months but years; one that so wanted to ensure the stream of profits from Singapore and the boost to bonuses that it was reluctant to impose tight controls; ...The very executives who "discovered" the huge bad trades on Mr. Leeson's books, in fact, ignored the many warning signals."
--By Marcus Brauchli, Nicholas Bray and Michael Sesit, March 6, 1995.
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7. Evidence Is Growing of Vietnamese Role In Exodus of Refugees
This investigative piece about the journey of one ship carrying 2,518 ethnic Chinese refugees from Vietnam helped raise the global profile of a burning issue: what to do with the burgeoning ranks of refugees from Indochina? It also offered the most concrete evidence to date that Vietnam's government was actively assisting in the exodus of these people.
"The captain said the Hi Hong had struck engine trouble and while idle had been boarded by the refugees, who arrived, he said, in 12 to 15 small boats. Later, however, the Hi Hong's captain told a different story by radio to the UN officials."
--By Raphael Pura and Barry Wain, November 9, 1978
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8. Japan's Land Myth Vexes Government
Documenting the slow-motion, decade-long deflation of Japan's great financial bubble was no easy task for a newspaper. This article, written after the stock market had already lost a fifth of its value from its all-time highs, looked squarely at the next big danger zone: real estate. Conventional wisdom said at the time that Japan's property market was impervious to the selloff that had undermined stocks. The Asian Wall Street Journal asked the question: what if it wasn't? In the decade following this article, of course, the answer to that question became clearer.
"Bankers, whose easy loans are widely blamed for pushing up land prices, have a different sort of worry about the high land prices. It concerns the possibility that land, like stocks, might take a big tumble. Few analysts think that likley. Yet should real estate, for whatever reason, lose its bearings and plunge, banks fear the result could be a wave of defaults that might cripple some of them."
--By Marcus Brauchli and Masayoshi Kanyabashi, March 28, 1990
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9. Sony Takes Over Columbia
Flush with cash, many Japanese electronic giants were on the prowl for acquisitions by the late eighties. But most, like Sony in its acquisition of Columbia, operated under the mistaken notion that a hardware company needed software to be complete - partly a result of the zaibatsu ethos that bigger is always better. The coming decade would prove this a mistaken synergy. This exclusive story, which broke the news of Sony's plans, nicely foreshadows the problems Sony would encounter in Hollywood and what was perhaps the larger lesson: The key management tenets of Japan Inc. didn't work well outside Japan (or even there).
"But despite its wealth, buying Columbia would represent a gamble for Sony. With a movie-studio acquisition, it would be sailing into uncharted waters. On the one hand, the purchase might give a big boost to Sony's efforts to promote new video products - such as its high-definition television - by allowing it to expand the range of movies and programs available on new formats. On the other hand, the analysts note that a Hollywood movie studio can be a tricky concern to run."
--By Marcus Brauchli and Yumiko Ono, September 27, 1989
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10. China's Grief: At First No One Seemed to Know, But Then Came the Tears
While accompanying a U.S. delegation to Beijing in the fall of 1976, Wall Street Journal Editor Robert Bartley became the unexpected witness to a remarkable event: the death of Mao Tse-tung, China's ruler for 27 years. As the news of Mao's death slowly spread from Beijing to the countryside, ordinary citizens were in shock. He dictated his unique account of China's mourning by phone to editors in Hong Kong.
"Nothing seemed unusual until gradually you recognized that the road was filling with a somber procession. Against the fields of corn and sorghum ready for harvest there came lines of bicycles, some with pigs or bundles of fodder strapped over back platforms."
--By Robert L. Bartley, September 10, 1976
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11. Possible Causes of SilkAir Crash Include Suicide
The Asian Wall Street Journal was the first news source to confirm that investigators looking into the crash of a SilkAir jet into Indonesia's Musi River in December 1997 were exploring the possibility that one of the pilots deliberately caused the crash. This theory gained increasing weight when other information about the pilot's history came to light. While Indonesia's official inquiry into the crash later dismissed the possibility of pilot suicide, the U.S. National Transportation Safety Board offered a stinging dissent, noting that findings by an international team of investors "lead to the conclusion that the airplane departed cruise flight as a result of an intentional maneuver requiring sustained manual flight control inputs that were most likely performed by the captain."
"Pilot suicide is so rare that investigators normally dismiss that possibility soon after a crash. But while it is extremely difficult to single-handedly bring down a plane -- a suicidal pilot would have to incapacitate his seatmate or wait until he was alone in the cockpit -- pilot sabotage isn't completely unknown; it has occurred a handful of times in aviation history."
--By Diane Brady, March 10, 1998
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12. Double Crossing: Abducted, Sold as Bride, Miss Hoan's Grim Odyssey
This harrowing tale of the traffic in human lives traced the kidnapping of a Vietnamese woman, Nguyen Thi Hoan, and her sale as a bride in China. Not only did the reporter tell the story from the viewpoint of the abductee, she also tracked down the Chinese family to whom the bride was sold.
"For several days, the 22-year-old was trucked and traded around southern China, changing hands four times before finally meeting the man who would be her husband. "I am writing while wiping away tears," she told her family in a letter she mailed secretly. 'Please come here and save me.'"
--By Samantha Marshall, August 4, 1999.
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13. Changes Put Suharto on Outside, Looking In
When Indonesia's President Suharto finally yielded to the inevitable and stepped down from power in May, 1998, nobody covered the story like the Journal. The morning that Mr. Suharto resigned, the AWSJ already had presaged the news with a prescient exclusive. Days later, Journal reporters pulled together a detailed account of the last days of the man who had ruled the world's fourth most populous nation for 32 years.
"Finally, the group concluded that there wasn't much choice: For a constitutional succession, Mr. Suharto had to yield power to Mr. Habibie, his protege of 45 years but a man who even Mr. Suharto had said earlier in the week wasn't qualified to be president. At 10:35 p.m., Gen. Wiranto, his mind made up, thanked his guests and returned to see Mr. Suharto. Less than 11 hours later, Mr. Habibie was sworn in."
--By Peter Waldman, Raphael Pura and Marcus Brauchli May 25, 1998
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14. Upstart PCCW's Takeover of HKT Marks Coup for Li, May Transform Asia Market
The takeover battle for Hong Kong's biggest telephone company was the Asian business story of 2000, and one that The Asian Wall Street Journal covered aggressively. The deal, at one point valued at over $38 billion, was easily Asia's most audacious takeover ever, given that the predator was an Internet startup with no revenues to speak of. But it also marked a coming of age for up-and-coming tycoon Richard Li, the long overshadowed son of Hong Kong's powerful Li Ka-shing and chairman of Pacific Century CyberWorks. The day the deal finally was sealed, the AWSJ capped weeks of great coverage with an exclusive account of how PCCW won its improbable victory over a much more-established rival.
"In HKT, PCCW thought it saw a way to build up a network and deliver its broadband Internet service and at the same time get needed cash flow to finance new projects. But PCCW was reluctant to challenge SingTel, and initially explored a joint bid for the Hong Kong company. The initial response from the SingTel side: bewilderment.
'We heard that Richard Li was going to come in and we couldn't believe it. He has no revenue, he has no cash and he has no synergies,' said a person close to the talks. 'We didn't believe he was serious.' "
--By Peter Wonacott, Thom Beal and Henny Sender, March 1, 2000
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15. Asia Pulp Asks Some Suppliers to Ease Terms
Asia Pulp & Paper Co., a Singapore-based company listed in New York and controlled by the Widjaja family of Indonesia, was not long ago considered one of the best-run companies in Southeast Asia. That is, until earlier this year, when The Asian Wall Street Journal began reporting the trouble APP was having meeting debt payments. A key story was this exclusive, which revealed that APP was asking suppliers for longer payment terms. Some six weeks later, APP halted all payment of interest and principal on roughly $12 billion in debts and obligations.
"Privately, some suppliers to APP say they are worried. 'Things have definitely got worse since last November. We've been experiencing a delay in payments,' said a supplier. In some cases, suppliers said they have started to take precautions, for instance reducing their exposure to APP, or by taking out insurance to cover the bulk of their contracts with APP.'"
--By Sara Webb, January 30, 2001
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16. Bre-X Breaks Many Unwritten Rules in Handling Rock Samples
The Bre-X case was one of history's biggest corporate frauds. Bre-X Minerals attracted investors with claims it found 71 million ounces of gold worth $24 billion in a rain forest deep in Indonesian Borneo. The claim turned out to be wildly exaggerated, setting in motion a series of tragedies. The company's chief geologist, Michael de Guzman, jumped from a helicopter to his death. The company had to seek bankruptcy court protection in Canada. And thousands of investors were swindled of a total of $4 billion after the stock tumbled to earth. How did 40,000 bags of worthless salted Busang rocks cause investors to see 71 million ounces of gold? The story marks one of the first attempts to unravel the mystery surrounding the initial exploration samples.
"Pantiyani saw Cesar opening the bags in the evenings, alone, she says. Sometimes, she says, she would be in the room when Cesar, working from documents in his hand, would line up the sample bags in sequence, open them and sometimes dip a pen or pencil inside as if mixing the rocks. She says she never saw him add any foreign material. But she and other Bre-X workers say Cesar would often remain in the recreation room long after midnight, by himself."
--By Peter Waldman and Jay Solomon, December 31, 1997
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17. Driver Straddles Two Worlds on China-Hong Kong Route
The story of Hong Kong's reversion to Chinese rule was a complex, nuanced one to tell, and The Asian Wall Street Journal approached it in many ways over the years. One memorable piece that stands out was this account of the trying, often surreal experiences of a Hong Kong truck driver who daily migrates between the two worlds that were to unite on July 1, 1997.
"Driving his container truck up an access road after stopping at a gas station, he spots two leather sofas in the glare of his headlights. It is an odd scene: In the dead of night, with open fields all around him, someone's discarded furniture is blocking his way in the middle of the road. But Mr. Yung has seen worse on the highways of south China, including dead animals and human corpses."
--By Jesse Wong, November 13, 1996
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18. Sink Hole: Family Shipping Firm Is One Reason BCCI Lost So Much Money
In the sixties a little-known Pakistani banker, Agha Hasan Abedi, began a small bank. Two decades later Abedi's bank, Bank of Credit and Commerce International, or BCCI, had grown into a multi-billion dollar financial empire. By the early nineties BCCI was close to collapse. Journal reporters tracked closely the investigation into BCCI, revealing the bank was involved in a range of criminal activities. But perhaps the saga's most riveting players were the Gokals, two Pakistani brothers whose fortunes rose and fell with the ill-fated bank.
"The Gokal loans, it has developed, helped transform BCCI into a factory of financial fraud. Covering up the problem involved creating 750 phony accounts, through which passed roughly $15 billion in funds over 15 years, the audit found. Investigators may never establish how much cash went up in smoke in the process.... The story of the Gokals' incestuous relationship with BCCI goes a long way toward explaining not only how the bank crashed, but perhaps more important, how it got so big."
--By Marcus Brauchli and Peter Truell, August 15, 1991
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19. Trail of Tears Yields Dashed Hopes for Many Chinese Migrant Workers
China's economic transformation has led throngs of workers from the remote villages to trek toward the coastal provinces in search of personal fortune. This tale was a rare and up-close account of one such journey.
"It's a telling moment for Ms. Hong. Young, full of dreams and ideals, she rushed to sign up when labor officials came to her farming village in remote Sichuan province to hire workers for Mattel Inc.'s Barbie-doll factory about 1,920 kilometers away in Changan, a town in Guangdong province. She even persuaded her two best friends to accompany her, promising adventure and easy money. Now, all she feels is the reality of having only a few yuan left in her pocket, the ache in her empty stomach - and a strong, sudden longing for home."
--By Kathy Chen, November 30, 1996.
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20. Two West German Firms Are Named by Pertamina in Bribery Probe
Allegations of illicit payoffs involving the state-owned oil company begin a compelling account of one of the biggest scandals to plague Indonesia during the early years of the Suharto administration.
"The charges and countercharges stem from a prolonged legal dispute over who owns Singapore bank accounts containing more than 60 million West German marks ($33.5 million) plus more than $1.4 million."
--By Raphael Pura and S. Karene Witcher, May 27, 1980
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21. Inside Bloody Kwangju: 'The Students Own It!'
In the early years of South Korean President Chun Doo-Hwan, students seized the southern city of Kwangju and demanded the release of then dissident politician Kim Dae-Jung. Their brief insurrection was brutally crushed by the South Korean military. Defying the odds, reporter Norman Thorpe got inside the besieged city to file this report.
"At Kwangju Christian Hospital, staff members explain that they have more than 60 wounded and four dead. Some have M16 gunshot wounds. A hospital staffer says some have wounds from M16 shots fired from helicopters."
--By Norman Thorpe and John Marcom Jr., May 23, 1980
22. Carrian: A Gilded Mystery Unravels; Property Empire Rose on Big Talk, But Others' Cash
A little-known Malaysian businessman arrives in Hong Kong in the late seventies, speculates wildly on the city's property markets, builds, and then bankrupts, a US$1 billion conglomerate. Intrigue, corruption, murder - the Carrian scandal had it all, and The Asian Wall Street Journal reported much of the juicy details exclusively from the very beginning.
"This lot is more important than it looks. It's one of the pillars upon which a US$1 billion conglomerate known as Carrian was built. For the past three years, Carrian has been Asia's most enigmatic business group. It burst on Hong Kong's property scene in late 1979 with a blitzkrieg buying sprees that shocked even the usually unflappable property barons here. Scuttlebutt linked the group to everyone from Imelda Marcos to Mideast sheiks. It was said to be rolling in cash."
--By Matt Miller, January 20, 1983
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23. How Malaysia Cornered the Tin Market
In 1980-81 Malaysia unwisely chose to speculate in global tin markets -- tin is a major Malaysian export -- through the nefarious Marc Rich. The scheme backfired, depressing the global tin market and Malaysia's economy, but Mahathir wasn't compelled to admit the state's involvement in the scheme (which drained large funds from Bank Bumiputra) until 1986. Our reporter gave readers an insider's account of the seamier workings of Malaysia Inc.
"The story shows the extraordinary influence a fast-talking foreign tin trader came to wield with the Malaysian government. It shows that high-ranking Malaysian officials directed the country's largest bank to make huge loans to a state-backed dummy company capitalized at M$2 to finance tin purchases."
--By Raphael Pura, September 22, 1986
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24. Students Cast Shadow on Historic Talks
The Tiananmen Square movement was coming to a boil just when then Soviet premier Gorbachev landed in Beijing, although the military crackdown on student protesters wouldn't occur for another two-and-a-half weeks. Gorbachev's visit was intended to thaw long chilly relations between China and the Soviet Union. Yet, as our reporters presciently point out, it occured against the background of what both leaders feared most might happen from their respective perestroikas: Insurrection.
"The timing of Mr. Gorbachev's visit puts the Chinese government in a bind. If the hunger-striking students are allowed to remain in Tiananmen, they are likely to greet Mr. Gorbachev as a savior - implicitly criticizing China's own lack of political reform. On the other hand, Beijing risks international condemnation and spoiling the tenor of the summit if it cracks down on the students' peaceful protests."
--By Adi Ignatius and Peter Gumbel, May 15, 1989
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25. Female Infanticide Stubbornly Persists in Indian Villages
Because girl brides in India traditionally command a marriage dowry, a price many poor villagers cannot pay, a cruel practice has arisen: Female infanticide. This story, while documenting the economics of poverty and social compulsion, focuses on the personal transformation of one midwide, Sanjha, from being a killer of infants into being their savior.
"Inside a bamboo shed in this poor village, a midwife named Sanjha presided over the brief labor of Ramkali Sah, an illiterate woman with wide eyes and a coy manner. Sanjha ushered a newborn out of Ramkali's womb, and announced a girl. The midwife knew then what the family would want. She would be told to murder the girl."
--By Miriam Jordan, May 11, 2000
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