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China’s official July trade data surprises on the upside

August 8, 2013

BEIJING - China’s trade growth rebounded in July, according to official figures, with exports gaining 5.1% y/y and imports surging 10.9%. ANZ Bank comments that, while the positive growth can be attributed to the low base last year, it believes an improvement in liquidity access in the aftermath of June’s cash crunch may have restored trading activities, resulting in the upside surprise.

A change of guard at the Reserve Bank of India

August 7, 2013

NEW DELHI – Dr Raghuram Rajan, currently India's Chief Economic Advisor, has been named as the next RBI governor to replace Dr Duvvuri Subbarao from September 4. Rajan has previously served as Professor of Finance at Booth School of Business - University of Chicago, the IMF and Federal Reserve Board. He will assume office at a time of pressing macro-economic challenges, with growth slowing and the rupee hitting new lows.

Excessive wages threaten Australia’s offshore oil, gas industry - Deloitte

August 7, 2013

SYDNEY – A new Deloitte Access Economics report into the economic pressures in Australia’s offshore oil and gas marine support sector has found increasing labour and operating costs, productivity issues and macro-economic challenges have significantly impacted the industry’s international competitiveness. The report provides critical economic context for the current round of enterprise bargaining agreement (EBA) negotiations that will set wages and conditions for vessels servicing Australia’s offshore resource industry for four years.

China set to loosen its one-child policy?

August 6, 2013

BEIJING - It is being widely reported by Chinese newsagencies that China’s “One Child Policy”, in place since 1978, may be loosened by end-2013 to help counter the ageing population problem. The reports indicate that if one parent is an only child, the couple will be allowed to have two children (currently, both parents must be only-children). China's working age population in 2012 fell for the first time, underscoring the disappearing "population dividend".

Indonesia’s second quarter GDP falls below 6 per cent

August 6, 2013

JAKARTA – Indonesia’s second quarter GDP has come in at a lower-than-expected 5.8% because of weaker private consumption and investment. This is the fourth consecutive quarter of slowing growth, after growth peaked at 6.4%% in the second quarter of 2012. BBVA Bank says the slowdown reflects the impact of uncertainty about the timing of an administered fuel price that took effect in June and subsequent inflation (8.6% y/y in July), increases in interest rates by Bank Indonesia (75 basis points in May and June), and weaker commodity prices.

China outpacing rest of world in natural resource use: UNEP

August 5, 2013


BANGKOK - China has surged ahead of the rest of the world in material consumption, creating intense environmental pressures - but it also remains among the most successful in the world in improving resource efficiency, according to a new report released by the United Nations Environment Programme (UNEP). The report found that China’s growing affluence has made it the world’s largest consumer of primary materials (such as construction minerals, metal ores, fossil fuels and biomass), with domestic material consumption levels four times that of the USA.

China’s steel companies slump in first half: Profit margin 0.13%

August 3, 2013

BEIJING - Suffering from chronic overcapacity, China’s steel mills have reported expanded losses and shrinking profit margins for the first half of the year, adding to the difficulty for the new Government in turning the industry around - 35 of 86 member companies of the China Iron & Steel Association are operating at a deficit, with the sales margin of the companies at only 0.13%.

Thailand to allow five foreign commercial banks to enter market

August 2, 2013

BANGKOK – Thailand’s Ministry of Finance has announced that it will allow up to five foreign commercial banks to establish a subsidiary in Thailand. A foreign commercial bank subsidiary is defined as a commercial bank where at least 95 per cent of its total shares are held directly or indirectly by a foreign commercial bank. The subsidiary must have paid-up registered capital of at least Baht20 billion and can apply to open as many as 20 branches and 20 off-premises ATMs in Thailand.

Official China PMI lifts in July, but HSBC numbers beg to differ

August 2, 2013

HONG KONG – Sharp conflict has emerged between official and private sector figures making up China’s Purchasing Managers’ Index (PMI) for July. The official National Bureau of Statistics PMI rose to 50.3, maintaining a +50 reading for a 10th consecutive month. The increase was broad-based, as readings for both large and small firms rose, reflecting an improvement in both domestic and external demand. However, the HSBC PM released almost simultaneously fell to 47.7 (exactly in line with last week’s HSBC PMI Flash estimate) from 48.2 in June, recording a sub-50 reading for a third month in a row.

US, ASEAN demand sees rebound in South Korean exports

August 2, 2013

SEOUL – South Korean exports grew 2.6% y/y in July, turning around from a 1.0% contraction in June. Imports also rose 2.7% y/y, surprising market expectations of -1.2%. As a result, the trade balance declined from June’s US$5.5 billion to US$2.7 billion in July. ANZ Bank says the outlook for the rest of 2013 appears brighter. Exports to the US have picked up in recent months (Q2 +9% y/y vs Q1 -4.7%), reflecting a general recovery of the US consumer market, and demand from both China and ASEAN registered positive growth in the first half.

South Korean investors target Australia in offshore push

August 2, 2013

SYDNEY – The foreign direct investment flow from South Korea into Australia is set to hit a record high in 2013, with institutional investors in Australia’s fourth largest trade market buoyed by a desire for core property and infrastructure assets, according to Andrew Cannane, GM-Corporte Clients with The Trust Company. He is tipping South Korean investment in foreign infrastructure and property offshore to exceed $5 billion in 2013,  including more than $1 billion to Australia.

Budget deficit likely dampener on Japan's stimulus policy: Atradius

August 1, 2013

TOKYO – In a new Country Report on Japan, export credit insurer Atradius says an immediate drawback of the Japanese Government’s stimulus policy is that the budget deficit is likely to exceed 10% of GDP in 2013, and that this could prove detrimental to Japans already record high public debt-to-DP ratio of more than 200 per cent.

Air Freight volumes begin to show signs of life as confidence improves

July 31, 2013

GENEVA - The International Air Transport Association (IATA)  has released June figures showing a 1.2% on-year expansion in global air freight demand. Although weak, this is an improvement when compared to 0.9% on-year demand growth recorded in May and just 0.1% growth realised over the first half of the year. IATA says while previously the global economic trend has been defined by robust emerging economies and stagnant growth in developed markets, the strongest improvements in business confidence are now occurring in some developed economies. Nevertheless, overall business confidence, a key indicator for air freight, continues to be weak.


From May to June, global freight volumes increased by 0.8%. A quarter of that improvement was captured by European airlines, which saw a 0.9% improvement in demand compared to May, and 2.6% up compared to June 2012. In contrast, Asia-Pacific carriers (the biggest players in global air freight) and North American airlines recorded year-on-year declines of 1.8% and 1.2% respectively.