The Asia business week

A week in business news from our bureau in Singapore

by the BBC's Neil Heathcote from Singapore

A new year dawned and Hai An, or Peaceful Sea, set sail for a bright new future - as the first boat to travel legally from Taiwan to China since the Communists won the civil war more than 50 years ago.

Unfortunately the sea was far from peaceful and it had to turn back after 15 minutes.

But the tide of history was not to be turned. The next day two other boats successfully completed the two-hour voyage from Taiwan's Kinmen Island to China's booming southern port of Xiamen.

A third boat, with 500 followers of a Taoist sea goddess on board, also completed the crossing - and the era of direct links between the two rivals began.

Or maybe not. It wasn't long before China was claiming that the crossings were no more than superficial - and wouldn't meet the requirements of cross-straits trade.

Elsewhere in the region, other symbolic political and economic changes were underway. And they were having just as rough a time of it.

Indonesia launched an ambitious programme to devolve financial and administrative powers back to its regions.

Plans to give financiaL powers back to it regions have faced difficulties.

Local governments in the vast archipelago have been given the power to appoint their own leaders and to prepare and administer their own budgets.

That was on Monday.

By Tuesday the key architect of the plan, Ryaas Rasyid, had tendered his resignation from the cabinet.

He cited differences with President Abdurrahman Wahid. But what started out as a good idea, it is feared, could in fact encourage separatist tendencies across the country, rather than defusing them.

In Thailand , Saturday's general election dominates the headlines - the first in the country since the Asian crisis.

Voters are expected to kick out Prime Minister Chuan Leekpai and his Democrat Party, who is blamed by many Thais for the slow pace of recovery from recession after the baht's collapse in 1997.

Prime Minister, Chuan Leekpai faces Thailand elections

But by the end of the week, all eyes in the region were on the US.

The Federal Reserve's late Christmas present surprised the financial markets - a cut in its key Federal funds rate by 50 basis points and its discount rate by 25 basis points.

On Thursday, it followed up with an additional 25 basis point cut in the largely symbolic discount rate.

Asia followed America's markets upwards, as the prospect of a 'hard landing' for the US economy seemed to recede.

Until, that is, it occurred to dealers that such abrupt cuts might mean the US was in worse trouble than they'd realised - and the soaring markets came back down to earth.