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China’s NPC meeting kicks off with 7.5% growth target, emphasizes market-oriented reforms

March 5, 2014

BEIJING - At the opening of the annual National People’s Congress in Beijing, Premier Li Keqiang has presented a “Government Work Report” reviewing economic developments and policy priorities for the coming year. The Report contains China’s official 2014 macro targets, all of which were in line with expectations and essentially unchanged from last year: GDP growth of 7.5%, inflation at 3.5%, M2 growth of 13.0%, and a fiscal deficit of 2.1% of GDP .

Xi urges Shanghai to spearhead reforms, calls FTZ a National Strategy

March 6, 2014

BEIJING - China’s President, Xi Jinping, has encouraged officials to make bold moves in the Shanghai free trade zone (FTZ) and to continue the zone’s leading role in spearheading China’s ongoing reform and opening-up drive. Xi made the remarks while taking part in a panel discussion with a delegation from Shanghai during the annual session of the National People's Congress.

South Korea unveils its own “third arrow” to boost medium-term growth

February 26, 2014

SEOUL - In an announcement reminiscent of Japan’s recent efforts to revive its economy, South Korea’s President, Park Geun-hye, hasy announced a “three-year economic innovation plan” aiming to lift medium-term growth, labour participation, and per capita income. Specific targets include a 4% annual GDP growth rate (compared with 2.8% in 2013), 70% labour participation rate (up from 65% at present), and per capita income of US$40,000 (up from US$28,000 at present).

Australian investment weak as mining investment falls: Big drag in 2014/15?

February 27, 2014

SYDNEY – Australian investment in the fourth quarter of 2013 was weak, down 5.2% on-quarter driven by a fall in mining investment. In a research note, HSBC says investment intentions were also weak, with the first estimates for 2014/15 suggesting a large fall, of 11-25 per cent, is expected as mining investment falls and there is only a modest rise in other sectors is expected.

Thai financial system not immune to weak political environment – S&P

February 21, 2014

SINGAPORE - A recent surge in cash withdrawals from a government-owned bank in Thailand suggests the currently weak political environment is starting to affect the country's financial system, but ratings agency Standard & Poor's sees the incident as politically motivated, rather than a sign of loss of confidence in any bank.

Why RMB appreciation has suddenly gone into reverse

February 21, 2014

HONG KONG - After a sustained period of appreciation, in which the RMB reached a record strength at 6.04 per USD on January 13, over the past week the currency has suddenly reversed course. The onshore spot rate has depreciated by almost 1% since mid-January, its largest decline since mid-2012, standing at 6.09 at present (one-year forward NDFs have also depreciated).

China flash PMI disappoints, but reflects New Year distortions

February 20, 2014

HONG KONG - China's flash HSBC manufacturing PMI declined in February to its lowest level since July, at 48.3 (consensus: 49.5; prior: 49.5). The outturn caused market sentiment to weaken (the Shanghai composite declined by 0.18%, along with declines of–-2.15% in Japan and 1.19% in Hong Kong) on persistent worries that growth may be slowing.

China’s Xi proposes equal consultations on cross-Strait political differences

February 19, 2014

BEIJING – China’s President, Xi Jinping in a meeting with the Kuomintang’s Honorary Chairman, Lien Chan, has saidhe is willing to hold cross-Strait consultations on political differences on an equal basis under the One-China principle. Lien said reconciliatory dialogues between the CPC and the Kuomintang in 2005 had led to peaceful development across the Strait, adding that both sides had embarked on the right course, which should not, and cannot, be reversed.

Thai, Bangladesh risks higher, but stable economies anchor sovereign ratings – S&P

February 19, 2014

SINGAPORE - Political uncertainties will stay elevated in Bangladesh and Thailand for some time and could hurt investor confidence and weaken economic activity, says Standard & Poor's, but the ratings agency expects the sovereign credit ratings on both two governments to remain unchanged over the next two years.

Bank of Japan expands lending facilities- but is it largely symbolic?

February 19, 2014

TOKYO - The Bank of Japan (BoJ) has left the pace of quantitative easing unchanged, as expected, at an annual expansion rate of ¥60-70 trillion in Japan’s monetary base – but at the same time has unexpectedly announced a doubling in size of two lending programmes, the “Fund-provisioning Measure to Stimulate Bank Lending” and the “Fund-provision Measure to Support Strengthening the Foundations for Economic Growth”. These programs were established in 2012 and 2010, respectively.