Northeast Asia

[The South Korean retirement scandal has] created huge risks to the integrity and legitimacy of the NPS [National Pension Service]. They know the math. There will have to be a push to diversify and decrease the overinvesting in a small number of companies.

China has a couple of options here. It could choose to be unhappy about this, but not make it a big issue. The other way they could see it is the first step in a kind of probe towards moving towards an official relationship. [Beijing] might calculate that it is better to react vigorously and strongly with the first step rather than wait for the situation to get worse.