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CHINA TO PUSH FOR FDI IN CENTRAL AND WESTERN REGIONS

May 20, 2013

BEIJING – China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC), have released a guideline to promote FDI into environment-friendly and labour-intensive industries in the nation’s Central and Western Provinces. The country aims for more FDI in agricultural and mining products, such as zinc and tin in Guangxi. Utilised foreign capital in central and western regions reached US$19.21 billion, up 36.7% from 2008, representing an increase of 4.2% of the national total in 2012, up 17.2% over the same time period.

VW JOINT VENTURE TO PRODUCE LOW-COST CAR FOR CHINA MARKET

May 20, 2013

BEIJING - Volkswagen Group has announced plans to produce a low-cost model (priced between RMB47,700 and RMB55,700) with its joint venture partner, FAW Car Co., as part of VW’s goal to be the world’s largest carmaker by 2018. China represented 31% of VW’s 9.2 million deliveries last year, with plans recently announced to build seven new factories in China, and the release of new and updated models in 2013. Increasing demand for VW products in China has helped counteract declining demand in Europe

LOWY INSTITUTE POLL SHOWS INDIANS SEE PAKISTAN, CHINA AS SECURITY THREAT

May 20, 2013

NEW DELHI - A new opinion poll prepared by the Lowy Institute, AN Australian think-tank, in partnership with the Australia India Institute, reveals that most Indians are positive about their economic prospects, supportive of democratic rights and deeply opposed to corruption. An overwhelming majority (80-85%) consider potential shortages of energy, food and water are ‘big threats’ to their country’s security.

EMERGING MARKETS HIGHLIGHT SALES GROWTH AT CANTON FAIR

May 19, 2013

GUANGZHOU - The Spring session of the Canton Fair, which closed on May 5, has outperformed expectations, welcomed more than 200,000 overseas purchasers, up 7% on the previous session. Organisers say the value of trade deals struck at the biannual event reached US$ 35.5 billion, an increase of nearly 9%. Observers said the results indicated steady improvement in this year's trade situation. China's foreign trade rose 13.4% on-year in the first quarter of 2013, with exports increasing 18.4%.

ASIA-PACIFIC CORPORATE DEBT TO SURPASS US AND EUROPE BY 2017 – S&P

May 17, 2013

HONG KONG - Asia-Pacific will represent half of the world's corporate debt demand of US$53 trillion over 2013-2017, with China comprising a third of global demand, according to a new report by Standard & Poor’s. "China's credit surge will propel Asia-Pacific's corporate debt to levels exceeding the combined debt of Western countries comprising the US, Canada, Eurozone and the UK," S&P credit analyst Terry Chan said. "We believe that Asia-Pacific's banks, which provide nine-tenths of corporate financing in the region, have the capacity to take on this monumental financing task.

POSITIVE SIGNS ON JAPAN’S GROWTH AS Q1 GDP BEATS EXPECTATIONS

May 17, 2013

TOKYO - Japan’s Q1 GDP growth has beat expectations in the latest sign that Abenomics is working to improve growth prospects. Q1 GDP on a non-annualised basis GDP grew by 0.9% on-quarter, accelerating from 0.3% in 2012 Q4. Growth was boosted by private spending and exports, with the latter benefitting from the yen’s depreciation. However, non-residential investment slowed, suggesting caution among the business sector. Looking ahead, BBVA Bank expects the Japanese economy to maintain improving growth trends, in line with BBVA’s full-year GDP growth projection of 1.7%.

MALAYSIA’S Q1 GDP GROWTH SLIDES, BUT TIPPED AT 5.5% FULL-YEAR

May 17, 2013

KUALA LUMPUR – ANZ Bank is holding its full-year 2013 GDP growth forecast for Malaysia at 5.5% on-year, despite GDP underperforming in Q1 (easing to 4.1%). ANZ says domestic demand growth is expected to accelerate further into Q2 and Q3 following the election result and a further push of large-scale investment projects. “Indeed, robust real import figures in March and the expansion of real money supply during the same month suggest momentum into Q2 has picked up,” ANZ says. The bank also expects Malaysia’s current account to be cyclically lower over the coming quarters.

CHINA SLOWDOWN AN INCREASING CONCERN FOR GLOBAL FUND MANAGERS - BoA SURVEY

May 16, 2013

BEIJING – The May monthly survey of global fund managers by Bank of America Merrill Lynch found that a quarter of respondents see a hard landing in China and a commodity collapse as their number one "tail risk", an increase from 18% in April. A total of 231 respondents with US$661 billion of assets under management participated in the survey, which indicates China’s economic slowdown is beginning to rival the European debt crisis (which dropped on the survey from 42% to 29%) in terms of concern to fund managers.

ANZ TIPS HIGHER INTEREST RATES IN INDONESIA, LOWER IN INDIA

May 16, 2013

SINGAPORE – ANZ Bank is tipping a further interest rate increase in Indonesia, to 6%, in the fourth quarter of this year – and believes there is now room for India to cut rates to 7% at its meeting on June 17. ANZ says a rate cut in Indonesia would provide some offset to the inflationary impulse from administered fuel price rises, with Bank Indonesia wanting inflation to remain within its target of 4.5% plus/minus 1% over coming quarters. In India, wholesale price inflation (WPI) for April at 4.89% was much weaker than market expectations, providing a second consecutive downside surprise.

TAIWAN MINISTER SEES LOWER YEN AS ”MIXED BLESSING”

May 15, 2013

TAIPEI - Taiwan's top economic planner is confident the economy can grow by 3% this year, achieving the Government’s target. Kuan Chung-ming, Minister of the Council for Economic Planning and Development (CEPD), described continued depreciation of the Japanese yen as a "mixed blessing". He noted that a lot of raw materials and semi-finished products come from Japan, so the yen's depreciation could be favourable to Taiwan. He also said he did not think continued depreciation of the Japanese yen will trigger a race of depreciation of Asian currencies (ATI).

TAIWAN EXPORTERS WANT LOWER NT$ AS YEN CONTINUES ITS FALL

May 15, 2013

TAIPEI – With the Japanese yen continuing to depreciate, Taiwan business groups are urging the Government to let the New Taiwan dollar weaken against its American counterpart to help Taiwanese exporters stay competitive. Chang Pen-tsao, Chairman of Taiwan's General Chamber of Commerce, says it is reasonable to let the NT dollar depreciate against the U.S. dollar at 30 to 31 NT$ to the US$. The exchange rate is currently around 29.6.

S&P MODERATES ASIA GROWTH FORECASTS FOR 2013 AS REBOUND SLOWS

May 14, 2013

HONG KONG - in a report published today, ratings agency Standard & Poor’s says that while Asia-Pacific continues to record strong real GDP growth relative to other regions, activity indicators in early 2013 suggest the rebound that began in the second half of 2012 has lost some traction. As a result S&P has lowered slightly its base case forecasts of 2013 real GDP growth for some countries. This sees China revised to 7.9%, Hong Kong to 3%, India to 6%, Japan to 0.6%, South Korea to 2.8%, Singapore to 1.9%, Thailand to 4.2%, and Vietnam to 5.3%.

WEAK DEMAND, STAGNANT CREDIT GROWTH CONCERNS IN VIETNAM

May 14, 2013

HO CHI MINH CITY – Vietnam’s Index of Industrial Production, released by the General Statistics Office (GSO), lifted by 5.8% on-year in April, while the HSBC Vietnam PMI posted above the neutral level for a second  month, indicating a gradual rise in production output and improvement in business conditions. In its monthly newsletter, Vietnam Asset Management (VAM) says that while the State sector is struggling to revive, FDI continues to flow into the manufacturing industry, especially the private sector.

CHINA GROWTH MODERATE AS FULL-YEAR FORECASTS CONTINUE TO FALL

May 13, 2013

BEIJING - China's urban fixed asset investment growth slightly accelerated to 20.6% on-year to RMB9.13 trillion in the first four months of 2013, according to the National Bureau of Statistics (NBS). Production grew 9.3% in April from a year earlier, while retail sales climbed 12.8%. In addition, M2, a broad measure of money supply, rose 16.1% on-year to RMB103.26 trillion, up RMB 111.1 billion on-year, according to the central bank. The 16.1% raise is an increase of 0.4% and 3.3% from the end of March and the end of 2012 respectively.

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