IN today’s market, big data can forecast probable demand before orders come in, and traders can make smaller and smaller runs to serve niche markets – in retail parlance, the ‘long tail’. The supply chain has become more complex and nuanced, and local 3D manufacturing will come into its own as individual markets become smaller . . .
CHINA is rolling out a US$630 billion infrastructure budget over three years. Japan has just committed US$61 billion to tourism infrastructure. The Philippines, Indonesia, Thailand and Singapore and Vietnam are committing to mega-projects. India is to lift infrastructure spending by 23%. In the US, both Presidential candidates are pledging hundreds of billions of dollars to infrastructure. Old-fashioned pump-priming is seen as the new economic panacea . . .
THE Coface global average of country ratings, which measure the average company credit risk in 160 countries, is at a peak not seen since the early 2000s, when the ratings were first created.
Reason 1: Sluggish world economic growth — The global economy remains stuck in a “Japanese-style” trap of sluggish growth, with few improvements even likely in 2017, which Coface believes may be the sixth year in which the global economy grows below 3%. Continuously sluggish global growth has been and is expected to continue to dampen business investment and consumer spending sentiment, weighing on demand.
Reason 2: Low world inflation — Consumer prices worldwide on average are expected to increase only 2.8% this year and by 3.0% in 2017, according to the International Monetary Fund (IMF). This would probably reduce the pricing power of companies, squeezing profit margins.
Reason 3: Sluggish energy and metal price recovery — While the rise in the price of a barrel of oil between February and June 2016 (from less than US$30 to around US$50) offers hopes to the economies that are not very
export-diversified, the price remains 55% below that of June 2014 and does not enable companies to increase profitability in this sector worldwide.
IN a climate of low global growth and low inflation, some of Asia’s ‘surplus’ currencies may find it more difficult to resist appreciation pressures as they seek to deploy their excess savings abroad
TSAI ING-WEN faces a number of domestic economic and social challenges — and a hostile Communist Party leadership in China determined that she will be a one-term President . . .
WHERE NOW for Hong Kong? China is willing to help when it comes to Hong Kong’s economy, but there is a direct link, says business, between economic growth and basic rights, freedoms and rule of law. Take these away and Hong Kong becomes just another Chinese city . . .
GROWTH in trade follows recovery in commodity prices, says CLSA’s Head of Economic Research, Eric Fishwick. It was the collapse incommodities that impacted Government revenue in emerging markets, causing those Governments to pull back on imports . . .
XI JINPING’s achievements in his first term have been impressive. One is the anti-corruption campaign, the second, reform of the PLA. Does he have plans to stay on till 2027 — in the Putin mould . . .
“WE have to be careful not to slip into accidental confrontation,” says Pippa Malmgren. “Right now, opposing fighter jets and spy planes are flying within 20 feet of each other. We could have an accident very
Malmgren, a respected consultant to governments and business, is former policy adviser to U.S. President, George W Bush. She lists some of the key geopolitical risks she sees today – the rise of China; breakup of the European Union; inflation; and the outcome of the US election . . .
FDI was up 12.5% to US$22.76 billion in 2015 and the drought has broken, allowing the Government to plan future growth . . .
INDIA’s new GST from next year should see an overall reduction in taxes on goods and services as local and national levels of taxes and levies collapse into a single payment. Business is ecstatic as it looks forward to higher growth, more foreign investment, cost savings and a more competitive economy. The unified system should also reduce corruption – and throw new light on the nation’s black economy, currently estimated to be reaping US$1.4 trillion a year . . .
CHINA hopes to build close partnerships with financial institutions, enterprises, multilateral development institutions and governments, says Jin Qi, CEO of the Silk Road Fund . . .
IN its broadest definition/vision, China’s Silk Road project could include 65 countries, involving 4.4 billion people and about 60 per cent of world GDP, says economist Stephen Jen. China has already signed Belt-and-Road MoUs with about 30 countries . . .
HSBC Group Chairman Douglas Flint asks if Belt-and-Road could be the catalyst for infrastructure to become acceptable as an asset class? “There is huge demand from the retirement systems for long-dated assets,” he says. “Investors are sick of the low growth environment.”
GOVERNMENT pledges to undertake structural reforms, such as liberalising foreign investment and land use, will help catalyse the effects of higher Government spending . . .