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HONG KONG — China’s days of investment-led double-digit GDP growth are over, according to Citibank. “Our economists expect the economy to adjust down to consumer-led 6-8% growth over the next decade. In lockstep, corporate earnings will also decelerate and quality, rather than quantity, of growth will increasingly dictate stock premiums and discounts,” the bank says.

JAKARTA – Bank Indonesia (BI) has surprised the market with the timing of an increase in its deposit facility rate (FASBI) by 25 basis points to 4.25%, but ANZ Bank says a move was not unexpected given recent action in currency markets. “Bank Indonesia is worried about the potential for instability arising from outflows from Indonesian assets,” ANZ says. The bank expects additional FASBI hikes should IDR remain under pressure.  It says the outflows from Indonesian assets that prompted BI to react have been significant. www.live.anz.com  (ATI).

SINGAPORE - The Japanese yen decline of the past few months should be positive for the rest of Asia, at least at the macro level, according to ratings agency Standard & Poor's, which says that, because most of the economies in the region are net importers from Japan, a weaker yen means cheaper imports. Net exporters to Japan, however, will lose out. "Although the recent steep decline in the yen has negative connotations for neighbouring economies' export competitiveness, we view the recent weakness of the yen as retracing the sharp gains seen during the depths of the 2008 global financial crisis," says Paul Gruenwald, S&P Asia-Pacific Chief Economist. "During the financial crisis, the yen appreciated sharply due to its status as a safe haven currency."

BEIJING – With China’s activity data in May indicating that growth has slowed further, ANZ Bank has revised its forecast for China’s GDP growth downwards - to 7.6% this year and 7.8% next year, from previous forecasts of 7.8% and 8.0%, respectively. “For this year specifically we think GDP will rebound somewhat to 7.9% in Q2 due to base effects, but moderate to 7.6% and 7.2% in Q3 and Q4 respectively,” ANZ says. “Meanwhile, tepid inflation in May also reflects a weak domestic demand. China’s CPI inflation was only 2.1% y/y in May, much lower than expected. For the whole year, we forecast CPI inflation could be at around 2.5%, which is 1ppt lower than this year’s 3.5% target.”

KUALA LUMPUR - Malaysia’s export growth for April has surprised on the down side, with import growth stronger than expected, bringing the trade surplus to the lowest level since November 1997. Export growth fell 3.3% y/y from -2.9% y/y the previous month, the third consecutive month of contraction On a product basis, weakness was fairly broad-based, with manufactured goods down 1.5% y/y driven by reduced shipments of electrical and electronic products. Commodity shipments of crude and petroleum products, LNG, and palm oil were also notably weaker on a volume basis compounded by their decline in value.

TAIPEI – Taiwan’s President, Ma Ying-jeou, has called for three-way talks with China and Japan on fishing and development of natural resources in the East China Sea, and the shelving of their sovereignty disputes over the Diaoyutai Islands. In an interview with Japan's Kyodo News, Ma said he hopes the East China Sea can become "a sea of peace and co-operation." Disputes in the area cannot be resolved unless Taiwan, China and Japan are all part of the process, said Ma.

BEIJING – Australia’s Compumedics Limited (ASX: CMP) has completed a $500,000 funding round into the Company with Beijing Bestmed, its long-term distributor in China. Beijing Bestmed becomes one of Compumedics’ top 10 shareholders with a 2.9% holding. The investment is split between equity and short-term debt. David Burton, Chairman and CEO of Compumedics, says Compumedics and Bestmed have built a significant footprint in China that will further develop as the sleep diagnostics and neurology markets there continues to develop.