Indias newly formed Aam Aadmi Party (AAP) had a spectacular debut in recent state elections. Its leader became the chief minister of the state of Delhi. The election results seemed to indicate a fundamental change-voters now perceive politicians not as "rulers," but as professionals with a limited mandate to serve. The AAP ran on an anti-corruption agenda, and Delhis new chief minister seems to "walk the walk." He uses public transport to commute to work, a refreshing change from the typical politician in India who is usually seen riding in a convoy of vehicles.

U.S. monetary policy seems likely to continue occupying center stage as people fret about interest rates. Last year was a somewhat instructive year for monetary policy theory in that it seemed to show that policies can be effective even when interest rates have no further room to be lowered. Can the nominal GDP in the U.S. grow at faster rates in 2014, and what would that mean for Asia? This month Matthews Asias Chief Investment Officer, Robert Horrocks, offers his insights into how reforms planned for China could be a key factor to change and what could lie ahead for the region overall

The main growth drivers of Asias science and technology industries are changing to become more domestically driven and service-oriented. These changes are happening as rising disposable income enables more Asian consumers to embrace new technologies.

Riding by train through the Sri Lankan highlands recently, I found it difficult not to be mesmerized by the views of mountains blanketed in tea plantings and cool mist. My days spent exploring Sri Lankas mountainous interior were among my favorite as a first-time visitor to the country.

My last visit to Beijing happened to coincide with the Communist Partys Third Plenum Meeting. General business sentiment was just as upbeat as it had been earlier last autumn. But through my discussions with different businesspeople, I came away with a distinct new optimism over the leaderships more market-oriented stance on policies.

2013 has been an eventful year for Chinas health care industry. There were several investigations into allegations of corruption and bribe-taking by doctors.

Today, Matthews Asia celebrates 10 remarkable years that have passed since we launched our Asia Growth strategy to U.S. investors. During this time, the region has evolved in many significant ways. In the early 2000s, only the "Asian Tiger" economies had managed to reach GDP per capita levels considered the tipping point for consumption growth. More recently, consumption has been on the rise in many of the regions economies, laying the foundation for Asias ongoing prosperity.

The sweeping victories for Indias pro-business opposition party, the Bharatiya Janata Party (BJP), in recent state elections were largely expected. But more stunning, to say the least, were unexpectedly strong gains in Delhi by a nascent, novice and underfunded political party known as the Aam Aadmi Party, or Common Mans Party.

I recently made my first visit to Vietnam and spent several days in Ho Chi Minh City. Considered by the investment community to be a frontier market, Vietnam has a low per capita income (approximately US$1,600), a relatively young population and less mature capital markets.

Using Silicon Valley as a yardstick to measure the success of Asias entrepreneurs is an interesting exercise. But it offers little insight into the development of more creative processes in Asia. Many policymakers in the region have declared innovation to be a national, strategic prioritycreating policies aimed at spurring growth to increase R&D expenditure, attract knowledge-intensive foreign direct investment and building more skilled labor pools. This month, Jerry Shih, CFA, takes a look at what changes are occurring around Asia to build more robust start-up ecosystems.

As humanitarian organizations scrambled to send relief to the Philippines this week following the countrys battering by Typhoon Haiyan, foreign governments prepared to support the rebuilding and economists looked to assess the tragedys near-term impact.

If you are a wealthy person living in Asia, you might be tempted, with good economic reason, to look overseas to diversify your asset base. Overseas markets often offer good diversification as they are typically exposed to different economic cycles and also give exposure to different currencies. But while overseas stocks, bonds and other financial instruments all offer diversification, few asset classes seem to have the same allure as overseas propertythat is, overseas property in the right cities.

Corporate governance practices in South Koreas family-controlled conglomerates, known as chaebol, find their roots in a social contract that was implicit in the process of the countrys economic development under military dictatorship, which began in the early 1960s. Koreas previously autocratic government initiated economic plans and wielded power in the private sector by assigning different areas of development to each of several chosen corporate families.

I traveled to China in September, quite possibly one of the best times of the year to visit in terms of weather. The air quality in both Beijing and Shanghai was actually pleasant and was very different from how it seemed during my previous visits as well as from the typical accounts one usually hears of the notorious smog in Chinas major cities. It made me think about growing up during the industrialization of my home country, South Korea.

When the Portuguese first landed on Taiwan, they called it Ilha Formosa or Beautiful Island. However, Taiwans route to success has been far more prosaicit rapidly industrialized by mass producing a wide range of consumer goods, including textiles and footwear, toys, bicycles, appliances and computer chips. It famously grew its economy via an export-driven model, making the Made in Taiwan label ubiquitous.

The financial reporting of corporations in Asia is complex, and having a solid grasp of all the nuances involved in these accounting practices is critical when making investment decisions. This month Research Analyst Sudarshan Murthy, CFA, kicks off the first in a series of commentaries on the science of forensic accounting. This first issue focuses on the numbers, and examines what is considered in order to understand a companys accounting decisions and the implications they can have on financial reports.

What is most impressive about Macau today is the strong sense of collaboration and commitment from all involved parties: both Macau and mainland Chinese government officials and casino operators. While Asias other gambling centers (Singapore, Malaysia, Cambodia and the Philippines) have also seen waves of notable development in recent years, Macau, in my opinion, should be recognized as the gold standard of the gaming space in Asia.

In an attempt to further liberalize Chinas economy, central government officials have created an experimental new free trade zone, which officially opened for business this week. The zone combines four existing but smaller development areas within Shanghai that are already exempt from import and export tariffs.

Many in Tokyo erupted with delight and excitement following the recent news of the citys selection as host to the 2020 Summer Olympic Games. Following a failed bid in 2016, Tokyo edged out rivals Istanbul and Madrid on its way to becoming the first Asian city to host the Games for a second time.

India has long been recognized as a country of vast potential. With over 1.2 billion people, it boasts nearly one-fifth of the worlds working age population. However, the countrys laws hark back to a period when Indias political philosophy was still rooted in socialisma time when the government ran its own factories. Such laws have failed to keep pace with the economic liberalization program that began in 1991.

Wages in China have surely risen, and some pundits argue that this growth will eventually make the country less competitive. But more nuanced and recent theories suggest that manufacturing centers can cluster around pools of more skilled labor, transportation networks and economies of scale. This month, Teresa Kong, CFA, examines the reasons why China is about more than just low-cost workers.

Swiftly after fighting off what most observers deemed to be a fairly weak incumbent Labor opposition in the recent Australian election, the leader of the Conservative coalition and the countrys newly crowned Prime Minister, Tony Abbott, firmly declared Australia to be once more open for business."

Recently, I had the opportunity to join one of our Matthews Asia portfolio managers during a research trip to India, and was reminded of both the importance of such on-the-ground visits as well as the rigor required to conduct them.

Comments from the Federal Reserve to begin reducing its stimulus operations have weighed heavily on markets across Asia in recent weeks. Growing investor concerns have largely centered on those economies that have been running current account deficits and that are likely to be further impacted by lower growth forecasts and reduced capital inflows. More short term, speculative flows from investors into fast-growing Asian economies have also fallen as expectations for higher interest rates in the U.S. have risen.

Matthews Asias investment team members regularly travel across Asia to conduct research. Between meeting with management teams, touring factories and catching flights from one destination to the next, we do, on occasion, need to eat. Sometimes its room service at midnight while typing up meeting notes, other times we may try some local food. For me, as a ramen lover, the growing number of ramen restaurants across Asia has been a real treat. Apparently, Im not alone in that thought.

Filial piety is a concept well-ingrained in many Asian cultures. Children are often taught to respect their elders, appreciate their hard work of parenting and to reciprocate that gratitude by looking after them in their old age.

After three decades under this military junta, Myanmar has thrown open its doors to change. Areas such as agriculture, mining, manufacturing and tourism all appear to be bursting with potential.

The democratic process in India is famously complex with innumerable caste coalitions and competing interests. With poverty widespread and so many living in remote villages, voter turnout can pose unique challenges.

Irecently came across an old newspaper article from February 1989 that described Beijings residential property "bubble," with average selling prices then of about US$430 to US$510 per square meter. The article went on to say that, given that the average college-educated worker typically saved less than approximately US$13 per month, at those prices, it would take a century or so to be able to buy a two-bedroom apartment. The writer concluded that a housing bubble was underway.

As some of our readers may already know, Matthews Asia is headquartered in San Francisco and just north of Silicon Valley, home to some of the worlds largest technology corporations as well as a hotbed for tech startups. The rise of Silicon Valley has been bolstered by its connections to nearby Stanford University as well as to the emergence of the areas venture capital industry on Sand Hill Road since the 1970s. This energy and entrepreneurial culture has helped create many innovative ventures that have disrupted traditional businesses.

Southeast Asia is pushing ahead with an economic initiative analogous to the E.U. called the ASEAN Economic Community (AEC). The 10-member bloc is striving to make this partnershipwhich envisions creating a single market and production base and developing closer economic ties both within the region and the broader global economya reality by 2015. In-Bok Song, takes a look at the benefits and hurdles that may be expected in this lengthy process for further integration of such aspects as liberalized trade, investment, skilled labor and free flow of capital.

Renowned as the worlds most wired country, South Korea has been quick to adopt and distribute cutting edge communications technology when it comes to both wired and wireless Internet gadgets.

Chinas economy has seen plenty of headwinds recentlyweak exports numbers, slower growth in both services and manufacturing and a weak recovery of corporate earnings despite rapid credit growth. Chinas equity markets have performed weakly too and have been extremely volatile. But much of the recent volatility has less to do with sagging growth and much more to do with a cash crunch and tight liquidity in Chinas banking system. What is going on?

In China, there is a distilled white liquor that is as revered as wine is in France. Known as Chinas national wine, maotai, or "baijiu" in Chinese, has been celebrated for thousands of years. Having such a high-end branded white spirit on your banquet table is seen as a sort of status symbol or the hallmark of an auspicious occasion, such as a wedding or formal dinner. As recently as last year, some bottles were commanding more than US$300 each, with prices rising partly from the strong demand related to government and business sector events.

Historically Asian markets have done well in periods of a weaker U.S. dollar and faster growth, so lowering peoples growth expectations and causing them to bid up the U.S. dollar is about the worst combination for Asian equities historically. And I do not think that Asias relation to global markets has changed significantly enough to nullify this past relationship. However, there are reasons to think that the effects on Asias equity prices may be a little more muted this time.

While yields have come off their historical lows in the U.S. and Asia, there is substantially more room for rates to continue to rise. In terms of credit spreads, we have seen investment grade and high yield spreads widen. We believe that spreads will have some room to widen given a repricing of risk across the globe.

The tone on investing in Japan has changed. In the six months leading up to May 22, the Tokyo Stock Price Index rose 66% in local currency terms, prompting investors to ask themselves the unthinkablewhy have I not allocated more to Japanese equities? During the same time the yen depreciated about 20%, giving Japans exporters some much-needed breathing room. However, while the financial markets have given the nod of approval to the economic policies of Prime Minister Shinzo Abe, or Abenomics, Japan may possibly be missing a learning opportunity.

Historically, China has focused on infrastructure and heavy industries at the expense of the service sector. Two years ago, service industries in China, such as hospitality, advertising, insurance and tourism, contributed a mere 43% of the countrys GDPwell below that of more developed economies like the U.S. and U.K, which saw nearly 80%. This month Sherry Zhang takes a look at the more balanced growth China will need in order to continue its economic trajectory over the next decade.

Obtaining a college degree in Asia, like elsewhere in the world, is a middle class dream. It is often considered a ticket to increased employment opportunity. But recently there has been some evidence to suggest that this is not always the case.

During my visit to Korea a few weeks ago, a hot debate over an alternative holiday system caught my attention. When a holiday falls on a weekend in Korea, it is not generally observed by businesses on the prior or subsequent weekday. However, the government has recently sought to change this despite strong opposition from interest groups and the business sector.

Sri Lanka has begun to reap the fruits of peace. By diverting resources that were previously spent on its military toward things like infrastructure, tourism and education, its economy has experienced solid growth. As our small car sat in traffic on the main road leading to the Colombo airport, my driver told me about the newly planned highway scheduled to open later this year. The Colombo-Katunayake Expressway, he said, would reduce my 1.5-hour trip to about 20 minutes. More importantly, I thought, we wouldnt be driven off the road by rickshaws referred to locally as tuk-tuks.&#

A Hong Kong investor once told me that he considered Asias capital markets to be like breaking waves; their rhythms often violent, but ultimately, they make a steady progression up the shore. It has often been noted that many Asia investors play these short-term rhythms. But ultimately the tide does come in and there is room for the long-term investor.

Japans stock market continues to rise while its currency heads in the other direction. Its new leaders, now enjoying high approval ratings, are battling deflation and trying to jump-start its economy with a new determination. This month Kenichi Amaki takes a look at what, if anything, is different this time.

In recent years, the rate of acquisitions of local Asian firms by multinational companies has generally increased, particularly in China. This has happened across many industries such as industrials, medical devices and consumer staples. In many cases, if the multinational firms are not acquiring an entire company outright, they are taking a controlling stake, rather than a minority stake as a passive shareholder.

In recent years, the rate of acquisitions of local Asian firms by multinational companies has generally increased, particularly in China. This has happened across many industries such as industrials, medical devices and consumer staples. In many cases, if the multinational firms are not acquiring an entire company outright, they are taking a controlling stake, rather than a minority stake as a passive shareholder.

In India, the fertilizer sector has long depended on gas as a key input. Over the last decade, several power plants that run on gas have been set up as well. Demand has grown 10% each year since 2002 while supplies, largely managed by state-owned enterprises (SOEs), have failed to keep pace. Inefficient capital allocation, lack of incentives and populist policies aimed at maintaining low prices have led the country to import 25% of its gas needs. This has further exacerbated Indias current account deficit, which now stands at 6.7% of GDP.

Over the past 20 years, Asia has come a long way to evolve into an asset class in itself. China and India have famously led the way as symbols of emerging nations. But when I think about seeking growth in Asia, I am particularly drawn to the regions smaller equity markets as attractive hunting grounds for investment opportunities. Asia continues to change at a rapid pace, and this change is not restricted to Chinas ever-changing landscape, but to many other areas that may see fewer media headlines.

Korea and Japan have been trailblazers in terms of making the virtual marketplace platform, through which merchants and manufacturers of all sizes can sell goods to consumers, an e-commerce model in Asia. Unlike in the U.S. and Europe, where many retailers sell directly to customers from their own websites and handle the details of commerce themselves, most Asian e-commerce takes place on megasites or virtual markets.

This year, investor attention has focused on Japan and its macroeconomic policy with hopes that rising inflation expectations might spur businesses to invest and consumers to spend. Since Prime Minister Shinzo Abe and Japans ruling Liberal Democratic Party (LDP) regained power late last year and proposed more aggressive monetary policies, including an ambitious inflation target, the yen has weakened more than 20% against the U.S. dollar and more than 15% against the euro.

Chinas new leaders are talking tough about fighting government corruption and imposing a culture of frugality among Communist Party cadres. Sensitive to growing criticism about government excess, incoming President Xi Jinping has promised to crack down on officials who abuse their power and engage in illicit behavior, regardless of their rank.