BEIJING - JAPANESE Prime Minister Naoto Kan's statement 'welcoming' China overtaking his nation as the world's second-largest economy points to a positive and strong change in future China-Japan relations, according to analysts.
Mr Kan made the comment at the World Economic Forum in Davos, Switzerland, which he visited on Saturday to address the VIP gathering. In his speech, Mr Kan said 'the world faces major changes that can be likened to a tectonic shift both in the national security and economic fields', and Asia is 'the centre of major tectonic changes'.
Against this background, he said, the Japan-US alliance 'is becoming even more important' and should continue to play a key role in the Asia-Pacific region.
'For Japan, its relationship with China, which is expanding its influence in Asia as it achieves remarkable economic growth, is extremely important,' Mr Kan added.
'Both Japan and China have an important responsibility to bear in the international community, and will need to enhance cooperation in a wide array of fields such as the economy, regional stability and the global environment,' he said.
After the speech, when asked if he was worried about Japan being overtaken by China as the world's second-largest economy last summer, Mr Kan said it was 'something that is welcoming'. 'China's growth will have a positive impact on Japan, both economically and socially,' said Mr Kan.
Source: http://www.straitstimes.com
Monday, January 31, 2011
Sunday, January 30, 2011
China and India in The Growth of Economy
The developed economies look with admiration and the rapid growth of Asian giants China and India, which depend for their long-term recovery. Economic experts and politicians have discussed the future of the Asian giants in the World Economic Forum in Davos, which concludes tomorrow. In 2020 China will overtake U.S. as world’s largest economy, according to Martin Jacques, who works at the Asia Research Centre at the London School of Economics and author of “When China rules the world.”
For his part, Michael Spencer, an expert on Asia and the Pacific at Deutsche Bank predicts that China will grow by 8 or 9% over the next decade, with inflation at 3 or 3.5 percent. Spencer believes that China will need about 40 years to reach the living standards of the United States and Europe. In this sense, Professor of Economics at Columbia University Xavier Salas-i-Martin said “I doubt that China will be economic leader because they are unable to innovate.”
“China reminds me of what happened to Japan and never materialized, because economic growth is driven by innovation and China back, but has not invented anything. Japan has never had an innovative system like Silicon Valley,” said Salas-i -Martin. He added that “China is still poor and (still) has to grow much and much copied” ·
“I bet on India, a system based on the creativity of the people. Silicon Valley is full of Indians,” said Salas-i-Martin.
China, which has a population of one thousand 334 million people and a per capita income of three thousand 678 U.S. dollars, is currently experiencing a rapid industrialization and urbanization. United States has a population of 307.4 million people and a per capita income of $ 46,381 (both figures in 2009). India has a population of one thousand 200 million people and a per capita income of $ 31 billion. In the coming years China will face a demographic change that will trigger a slowdown in growth in the workforce and will push to maintain a high growth rate, according to the chief China economist at UBS, Wang Tao.
Source: http://www.coffetoday.com
For his part, Michael Spencer, an expert on Asia and the Pacific at Deutsche Bank predicts that China will grow by 8 or 9% over the next decade, with inflation at 3 or 3.5 percent. Spencer believes that China will need about 40 years to reach the living standards of the United States and Europe. In this sense, Professor of Economics at Columbia University Xavier Salas-i-Martin said “I doubt that China will be economic leader because they are unable to innovate.”
“China reminds me of what happened to Japan and never materialized, because economic growth is driven by innovation and China back, but has not invented anything. Japan has never had an innovative system like Silicon Valley,” said Salas-i -Martin. He added that “China is still poor and (still) has to grow much and much copied” ·
“I bet on India, a system based on the creativity of the people. Silicon Valley is full of Indians,” said Salas-i-Martin.
China, which has a population of one thousand 334 million people and a per capita income of three thousand 678 U.S. dollars, is currently experiencing a rapid industrialization and urbanization. United States has a population of 307.4 million people and a per capita income of $ 46,381 (both figures in 2009). India has a population of one thousand 200 million people and a per capita income of $ 31 billion. In the coming years China will face a demographic change that will trigger a slowdown in growth in the workforce and will push to maintain a high growth rate, according to the chief China economist at UBS, Wang Tao.
Source: http://www.coffetoday.com
Thursday, January 27, 2011
Japanese exports surge 13 per cent
Japanese exports accelerated for the second month in December, adding to the optimism in Davos about the recovery in the global economy.
Shipments from Asia’s second-largest economy rose 13 per cent last month, compared to a year earlier, to Y6,112bn ($73.6bn), faster than November’s 9.1 per cent rise, according to statistics from the Ministry of Finance released on Thursday. Exports to the US were particularly strong, gaining 16.5 per cent.
Imports also grew but at a slower pace than in November. As a result, the trade surplus expanded 34.1 per cent to Y727.7bn, the fastest since September and more than economists had estimated.
The recent acceleration ties in with the moderate confidence in the global recovery being expressed at the World Economic Forum in Davos, and the International Monetary Fund’s forecast that the global economy will grow at a pre-crisis rate over the next couple of years.
It also helps to fuel confidence that the Japanese economy can continue to expand in spite of the end of domestic stimulus measures.
Japan’s stronger exports to the US also reflect comments by Zhu Min, a special adviser to the IMF, who on Wednesday described a “three-speed” recovery. He said that while emerging economies would continue to expand much faster than developed countries, the US would benefit from ongoing stimulus, while other advanced economies would grow slowly as they shift to austerity measures.
Although the yen remains close to 15-year highs at Y82.13, the Japanese currency has recently been less volatile and some economists, such as Yuriko Tanaka at Goldman Sachs, are not expecting the yen to climb much higher, which should help exports.
“As the yen appreciation trend seems to have run out of gas, we think exports should sustain growth on the strength of the US economy,” said Ms Tanaka.
The yen’s sharp climb against the US dollar during 2010 had been weighing on exports and business confidence. In September, the strength of the yen forced the finance ministry to intervene in the currency markets for the first time in more than six years.
On a seasonally-adjusted basis, export volumes grew 8.5 per cent in December, close to levels not seen since the financial crisis, according to estimates from Credit Suisse. The finance ministry does not provide data for volumes, which are a better guide to activity in the Japanese economy and demand from overseas.
The Bank of Japan earlier this week raised its real gross domestic product growth forecast for the year ending in March to 3.3 per cent from its October forecast of 2.1 per cent.
“Japan’s economy is expected to gradually overcome the deceleration in the pace of improvement and return to a moderate recovery path as the growth rate of the global economy is likely to start increasing again led by emerging and commodity-exporting economies,” the BoJ said.
Markets welcomed the trade figures and the Nikkei 225 gained 0.8 per cent to 10,482.77 in early afternoon trading.
Source: http://www.ft.com
Shipments from Asia’s second-largest economy rose 13 per cent last month, compared to a year earlier, to Y6,112bn ($73.6bn), faster than November’s 9.1 per cent rise, according to statistics from the Ministry of Finance released on Thursday. Exports to the US were particularly strong, gaining 16.5 per cent.
Imports also grew but at a slower pace than in November. As a result, the trade surplus expanded 34.1 per cent to Y727.7bn, the fastest since September and more than economists had estimated.
The recent acceleration ties in with the moderate confidence in the global recovery being expressed at the World Economic Forum in Davos, and the International Monetary Fund’s forecast that the global economy will grow at a pre-crisis rate over the next couple of years.
It also helps to fuel confidence that the Japanese economy can continue to expand in spite of the end of domestic stimulus measures.
Japan’s stronger exports to the US also reflect comments by Zhu Min, a special adviser to the IMF, who on Wednesday described a “three-speed” recovery. He said that while emerging economies would continue to expand much faster than developed countries, the US would benefit from ongoing stimulus, while other advanced economies would grow slowly as they shift to austerity measures.
Although the yen remains close to 15-year highs at Y82.13, the Japanese currency has recently been less volatile and some economists, such as Yuriko Tanaka at Goldman Sachs, are not expecting the yen to climb much higher, which should help exports.
“As the yen appreciation trend seems to have run out of gas, we think exports should sustain growth on the strength of the US economy,” said Ms Tanaka.
The yen’s sharp climb against the US dollar during 2010 had been weighing on exports and business confidence. In September, the strength of the yen forced the finance ministry to intervene in the currency markets for the first time in more than six years.
On a seasonally-adjusted basis, export volumes grew 8.5 per cent in December, close to levels not seen since the financial crisis, according to estimates from Credit Suisse. The finance ministry does not provide data for volumes, which are a better guide to activity in the Japanese economy and demand from overseas.
The Bank of Japan earlier this week raised its real gross domestic product growth forecast for the year ending in March to 3.3 per cent from its October forecast of 2.1 per cent.
“Japan’s economy is expected to gradually overcome the deceleration in the pace of improvement and return to a moderate recovery path as the growth rate of the global economy is likely to start increasing again led by emerging and commodity-exporting economies,” the BoJ said.
Markets welcomed the trade figures and the Nikkei 225 gained 0.8 per cent to 10,482.77 in early afternoon trading.
Source: http://www.ft.com
Wednesday, January 26, 2011
South Korea economic growth slows in Q4
South Korea‘s economy, which is Asia’s fourth-largest, saw growth slow to 0.5% in the October to December period.
Last year, the economy expanded strongly – boosted by exports and increasing consumption and facilities investment.
However, retail spending and manufacturing and construction slowed, which was attributed to the slowdown.
The Bank of Korea were optimistic about the figures, however, and said growth will pick up in the current quarter.
On an annual basis, meanwhile, the economy grew by 6.1% – the fastest pace since 2002, said the Bank.
The Bank’s head of economic statistics, Jung Youg-Taek, said: “We can say the country has now got out of the global financial crisis. The domestic economy will continue to expand every quarter this year, although there could be some ups and downs.”
Analysts expect the rate of economic growth to accelerate in the current quarter due to rising exports and local demand, which, in turn, will drive inflation expectations higher.
Earlier this month, the central bank lifted interest rates to 2.75%, in an attempt to dampen rising prices.
In related news, South Korea currently has the lowest unemployment rate in the 33-member OECD countries.
Source: http://www.financemarkets.co.uk
Last year, the economy expanded strongly – boosted by exports and increasing consumption and facilities investment.
However, retail spending and manufacturing and construction slowed, which was attributed to the slowdown.
The Bank of Korea were optimistic about the figures, however, and said growth will pick up in the current quarter.
On an annual basis, meanwhile, the economy grew by 6.1% – the fastest pace since 2002, said the Bank.
The Bank’s head of economic statistics, Jung Youg-Taek, said: “We can say the country has now got out of the global financial crisis. The domestic economy will continue to expand every quarter this year, although there could be some ups and downs.”
Analysts expect the rate of economic growth to accelerate in the current quarter due to rising exports and local demand, which, in turn, will drive inflation expectations higher.
Earlier this month, the central bank lifted interest rates to 2.75%, in an attempt to dampen rising prices.
In related news, South Korea currently has the lowest unemployment rate in the 33-member OECD countries.
Source: http://www.financemarkets.co.uk
Tuesday, January 25, 2011
South Korean Economy Probably Expanded Last Quarter as Inflation Quickened
South Korea’s economic growth likely moderated in the fourth quarter as quickening inflation added pressure on the central bank to extend interest-rate increases.
Gross domestic product rose 0.4 percent in the three months through December from the third quarter, when it gained 0.7 percent, according to the median of 12 estimates in a Bloomberg News survey. The data are released at 8 a.m. in Seoul tomorrow.
President Lee Myung Bak has declared “war” on inflation, with the government announcing price controls and the central bank this month raising borrowing costs for the third time since the global financial crisis. The slowdown in the fourth quarter led by cooling investment will likely be temporary, analysts at DBS Group Holdings Ltd. said yesterday.
“Policy makers are focusing more on inflation now,” said Lee Sang Jae, an economist at Hyundai Securities Co. in Seoul. “The Bank of Korea is expected to keep normalizing rates as the economy will likely continue to post solid growth, supported by exports.”
The won rose 0.3 percent to 1,118.25 per dollar at the 3 p.m. close in Seoul, while the Kospi share index gained 0.2 percent, according to data compiled by Bloomberg. The currency has risen 2.9 percent in the past 12 months, the third-weakest advance in Asia, helping to support trade gains in the export- led economy.
The recovery in the U.S. economy may lead the central bank to increase its forecast for South Korean growth this year from the current estimate of 4.5 percent, Bank of Korea Governor Kim Choong Soo said on Jan. 19.
Annual Growth
Asia’s fourth-largest economy expanded 4.6 percent last quarter from a year earlier, according to the median estimate of 15 economists in another Bloomberg News survey. GDP increased at an annual rate of 4.4 percent in the three months through September.
Inflation will likely hover around 3.5 percent for an “extended period” driven by economic growth and rising raw material costs, Kim also said. The Bank of Korea targets consumer-price growth of 2 percent to 4 percent from 2010 through 2012.
The monetary authority raised the benchmark interest rate by a quarter of a percentage point this month to 2.75 percent, adding to similar moves in July and November from a record low. Borrowing costs have remained below inflation for a record 14 straight months, skewing incentives toward spending.
Inflation Threat
“We should revise our inflation forecast upwards, given our economic growth, the high level of inflation pressures in China and rising raw material costs,” one unnamed member of the Bank of Korea board said in minutes of the December interest-rate policy meeting released today. “Inflation may threaten our target ceiling, so we should act with a preemptive monetary policy.”
Some Asian counterparts have raised rates more aggressively. Thailand increased borrowing costs for the fourth time in seven months in January, while India boosted its benchmark rate to a two-year high today.
“The policy rate is unlikely to rise above 3.5 percent at the end of this year, as faster and larger increases would be a drag on domestic demand and slow economic growth, which the government expects to be 5 percent in 2011,” said Oh Suk Tae, an economist at SC First Bank Korea Ltd. in Seoul.
Exports rose for a 14th consecutive month in December. Overseas shipments are equivalent to about half the economy and boosted earnings last year at companies including Samsung Electronics Co., Asia’s biggest maker of semiconductors, flat screens and mobile phones.
Capital Inflows
South Korea has joined emerging markets from Thailand to Brazil in striving to counter foreign capital inflows and pare currency gains. The nation has revived taxes on overseas investors in domestic government bonds and tightened scrutiny of trading in foreign-currency derivatives.
Officials may tolerate higher gains in the won to offset rising prices for imported goods such as crude oil and food grains, SC First Bank’s Oh said.
The government on Jan. 13 announced plans to reduce import tariffs on some food items and freeze the cost of utilities, including electricity and gas. The administration also said it will ask steelmakers to refrain from raising prices.
Source: http://www.bloomberg.com
Gross domestic product rose 0.4 percent in the three months through December from the third quarter, when it gained 0.7 percent, according to the median of 12 estimates in a Bloomberg News survey. The data are released at 8 a.m. in Seoul tomorrow.
President Lee Myung Bak has declared “war” on inflation, with the government announcing price controls and the central bank this month raising borrowing costs for the third time since the global financial crisis. The slowdown in the fourth quarter led by cooling investment will likely be temporary, analysts at DBS Group Holdings Ltd. said yesterday.
“Policy makers are focusing more on inflation now,” said Lee Sang Jae, an economist at Hyundai Securities Co. in Seoul. “The Bank of Korea is expected to keep normalizing rates as the economy will likely continue to post solid growth, supported by exports.”
The won rose 0.3 percent to 1,118.25 per dollar at the 3 p.m. close in Seoul, while the Kospi share index gained 0.2 percent, according to data compiled by Bloomberg. The currency has risen 2.9 percent in the past 12 months, the third-weakest advance in Asia, helping to support trade gains in the export- led economy.
The recovery in the U.S. economy may lead the central bank to increase its forecast for South Korean growth this year from the current estimate of 4.5 percent, Bank of Korea Governor Kim Choong Soo said on Jan. 19.
Annual Growth
Asia’s fourth-largest economy expanded 4.6 percent last quarter from a year earlier, according to the median estimate of 15 economists in another Bloomberg News survey. GDP increased at an annual rate of 4.4 percent in the three months through September.
Inflation will likely hover around 3.5 percent for an “extended period” driven by economic growth and rising raw material costs, Kim also said. The Bank of Korea targets consumer-price growth of 2 percent to 4 percent from 2010 through 2012.
The monetary authority raised the benchmark interest rate by a quarter of a percentage point this month to 2.75 percent, adding to similar moves in July and November from a record low. Borrowing costs have remained below inflation for a record 14 straight months, skewing incentives toward spending.
Inflation Threat
“We should revise our inflation forecast upwards, given our economic growth, the high level of inflation pressures in China and rising raw material costs,” one unnamed member of the Bank of Korea board said in minutes of the December interest-rate policy meeting released today. “Inflation may threaten our target ceiling, so we should act with a preemptive monetary policy.”
Some Asian counterparts have raised rates more aggressively. Thailand increased borrowing costs for the fourth time in seven months in January, while India boosted its benchmark rate to a two-year high today.
“The policy rate is unlikely to rise above 3.5 percent at the end of this year, as faster and larger increases would be a drag on domestic demand and slow economic growth, which the government expects to be 5 percent in 2011,” said Oh Suk Tae, an economist at SC First Bank Korea Ltd. in Seoul.
Exports rose for a 14th consecutive month in December. Overseas shipments are equivalent to about half the economy and boosted earnings last year at companies including Samsung Electronics Co., Asia’s biggest maker of semiconductors, flat screens and mobile phones.
Capital Inflows
South Korea has joined emerging markets from Thailand to Brazil in striving to counter foreign capital inflows and pare currency gains. The nation has revived taxes on overseas investors in domestic government bonds and tightened scrutiny of trading in foreign-currency derivatives.
Officials may tolerate higher gains in the won to offset rising prices for imported goods such as crude oil and food grains, SC First Bank’s Oh said.
The government on Jan. 13 announced plans to reduce import tariffs on some food items and freeze the cost of utilities, including electricity and gas. The administration also said it will ask steelmakers to refrain from raising prices.
Source: http://www.bloomberg.com
Monday, January 24, 2011
Asian shoppers thirst for luxury
Something quite extraordinary is happening across Asia.
In the big cities all across the continent, people are shopping as though their lives depended on it, day after day.
In Singapore and Hong Kong, it's been the main leisure pursuit for years.
But now, rather suddenly, the cult of luxury shopping is spreading - and China is emerging as what will soon be the biggest luxury market in the whole world.
Eclipsed
So many times in the past few decades, the insatiable appetite of the Americans for imported consumer goods has helped the world out of recession or helped to avoid it.
But if China's emerging class of consumers put their mind to it - up to 800 million of them, compared with roughly 200 million in the USA - their buying power will shape the needs and demands of the rest of the world.
In 2010 China became the biggest marketplace in the world for cars. It was already the largest market for mobile phones. The world's second largest economy, Japan, has been deposed - replaced (of course) by China.
And the place that has hitherto been the great consuming nation - the USA - is soon going to be eclipsed. Asians seem to have an even hungrier appetite for luxuries: people who only 20 years ago hardly knew what bling was.
Status symbols
Retail expert Paul Husband has been based in Hong Kong for 25 years and he knows the scale of what's happening in the East.
And with his Louis Vuitton bag, Cartier watch and Ferragamo shoes, he knows a thing or two about luxury too.
"It began really in the very late 80s and early 90s," he says, when the first luxury brands like Dunhill began to enter China.
These pioneers tended to base themselves in and around western hotels - although their customers were not always westerners.
"It was opening the cult of luxury. At that time of course, you would see them in hotels and not on the street because the people with money - well, quite frankly one might have questioned where the money had come from. They had to be very discreet. Hence the luxury stores also had to be fairly invisible to the street. One didn't want to be seen going in."
But thirty years later attitudes are different. China has a more relaxed attitude toward wealth and many Chinese have successfully followed Deng Xiaoping's maxim that "to be rich is glorious".
Rags to riches
The workshop of Chinese fashion designer Zhang Zhifeng in the posh centre of Beijing is a vivid example of the opportunities open to an entrepreneur in a China moving quickly from communist puritanism to Western-style consumerism.
The ambitious but approachable designer, who heads up the label Tiger NE, is one of the people in China trying to create expensive luxury brands that speak directly to this booming market of people with newly acquired wealth.
His own story is a peculiarly Chinese take on the rags to riches tale.
"At the time of the cultural revolution, my dad was labelled as a capitalist and thrown into a gulag-style labour farm," says Mr Zhang.
"Our family was dirt poor. My mum had to learn tailoring just to make a living, to feed the family."
Mr Zhang learned the craft too, and after graduating from high school he opened his own small shop - just him and a sewing machine.
"This was in 1982. This was still the early days of China's reform and opening up."
When the government began to allow cross-border bartering, Mr Zhang's position on the Sino-Russian border meant that he was able to take advantage of one of the first market liberalisations.
"Because of the barter trade, my business started to take off," he says. "Initially it was just a one man show, and then family and friends joined in to help as more and more business came my way. Soon, in 1985, my shop hired more than 300 employees."
"I was one of the first Chinese who had the opportunity to go abroad," says Mr Zhang, who visited his trading partners in the former Soviet Union, and, eventually, Europe and America.
'All we had was quantity'
"The more I saw, the more I realised what the differences were between the Chinese and Western clothing industries. For example, the cost of making a shirt in China was about 20 Yuan and the shirt retailed for about 30. But in the States and Europe, a shirt can often fetch anywhere from US $30 to about $100."
In the West, the brand and the design quality had all been factored into the price, he realised, "but all we had in China was quantity. That was when I decided to improve and move into the high end fashion business."
NE Tiger was registered as a brand in 1992. At the time, a Chinese-owned and run luxury brand was highly unusual - and remains so today according to Zhang Zhifeng.
"In Beijing and Shanghai, our shops are still mainly surrounded by Western brand shops," he says.
"The only Chinese high end brand is mine. We are soon to launch a flagship store in Shanghai central shopping district where my new neighbours will be the likes of Louis Vuitton."
Expanding
This puts Mr Zhang is in a good position to take advantage of Asia's luxury boom, according to Paul Husbands.
"There's a view that by 2014/15, China will be the largest luxury goods market in the world, meaning that consumption in China and consumption offshore by mainland Chinese would outperform Japan, America and Europe," says the retail expert.
"It's the one large market in the world where we cannot see really an end to the market."
The rise in demand for luxury goods is not just confined to China - it is happening across Asia.
For the series Start-up Stories, I have been speaking to entrepreneurs across the continent, some of whom are looking for a slice of this expanding market.
I've heard from Ho Kwon Ping, whose luxury resort chain Banyan Tree is now exporting an Asian take on luxury to the rest of the world. And I've spoken to watch retailer Jannie Tay and chocolatier Lyn Lee, whose businesses started in Singapore but now trades across Asia.
There are bound to be many more of these stories to come. The arrival of a mass of Asian consumers is quite extraordinary. It's potentially much more significant for the global economy than the 30 year emergence of China as the world's great manufacturing centre.
As we're about to see, when people start to become consumers, what they want is a little bit of luxury.
Source: http://www.bbc.co.uk
In the big cities all across the continent, people are shopping as though their lives depended on it, day after day.
In Singapore and Hong Kong, it's been the main leisure pursuit for years.
But now, rather suddenly, the cult of luxury shopping is spreading - and China is emerging as what will soon be the biggest luxury market in the whole world.
Eclipsed
So many times in the past few decades, the insatiable appetite of the Americans for imported consumer goods has helped the world out of recession or helped to avoid it.
But if China's emerging class of consumers put their mind to it - up to 800 million of them, compared with roughly 200 million in the USA - their buying power will shape the needs and demands of the rest of the world.
In 2010 China became the biggest marketplace in the world for cars. It was already the largest market for mobile phones. The world's second largest economy, Japan, has been deposed - replaced (of course) by China.
And the place that has hitherto been the great consuming nation - the USA - is soon going to be eclipsed. Asians seem to have an even hungrier appetite for luxuries: people who only 20 years ago hardly knew what bling was.
Status symbols
Retail expert Paul Husband has been based in Hong Kong for 25 years and he knows the scale of what's happening in the East.
And with his Louis Vuitton bag, Cartier watch and Ferragamo shoes, he knows a thing or two about luxury too.
"It began really in the very late 80s and early 90s," he says, when the first luxury brands like Dunhill began to enter China.
These pioneers tended to base themselves in and around western hotels - although their customers were not always westerners.
"It was opening the cult of luxury. At that time of course, you would see them in hotels and not on the street because the people with money - well, quite frankly one might have questioned where the money had come from. They had to be very discreet. Hence the luxury stores also had to be fairly invisible to the street. One didn't want to be seen going in."
But thirty years later attitudes are different. China has a more relaxed attitude toward wealth and many Chinese have successfully followed Deng Xiaoping's maxim that "to be rich is glorious".
Rags to riches
The workshop of Chinese fashion designer Zhang Zhifeng in the posh centre of Beijing is a vivid example of the opportunities open to an entrepreneur in a China moving quickly from communist puritanism to Western-style consumerism.
The ambitious but approachable designer, who heads up the label Tiger NE, is one of the people in China trying to create expensive luxury brands that speak directly to this booming market of people with newly acquired wealth.
His own story is a peculiarly Chinese take on the rags to riches tale.
"At the time of the cultural revolution, my dad was labelled as a capitalist and thrown into a gulag-style labour farm," says Mr Zhang.
"Our family was dirt poor. My mum had to learn tailoring just to make a living, to feed the family."
Mr Zhang learned the craft too, and after graduating from high school he opened his own small shop - just him and a sewing machine.
"This was in 1982. This was still the early days of China's reform and opening up."
When the government began to allow cross-border bartering, Mr Zhang's position on the Sino-Russian border meant that he was able to take advantage of one of the first market liberalisations.
"Because of the barter trade, my business started to take off," he says. "Initially it was just a one man show, and then family and friends joined in to help as more and more business came my way. Soon, in 1985, my shop hired more than 300 employees."
"I was one of the first Chinese who had the opportunity to go abroad," says Mr Zhang, who visited his trading partners in the former Soviet Union, and, eventually, Europe and America.
'All we had was quantity'
"The more I saw, the more I realised what the differences were between the Chinese and Western clothing industries. For example, the cost of making a shirt in China was about 20 Yuan and the shirt retailed for about 30. But in the States and Europe, a shirt can often fetch anywhere from US $30 to about $100."
In the West, the brand and the design quality had all been factored into the price, he realised, "but all we had in China was quantity. That was when I decided to improve and move into the high end fashion business."
NE Tiger was registered as a brand in 1992. At the time, a Chinese-owned and run luxury brand was highly unusual - and remains so today according to Zhang Zhifeng.
"In Beijing and Shanghai, our shops are still mainly surrounded by Western brand shops," he says.
"The only Chinese high end brand is mine. We are soon to launch a flagship store in Shanghai central shopping district where my new neighbours will be the likes of Louis Vuitton."
Expanding
This puts Mr Zhang is in a good position to take advantage of Asia's luxury boom, according to Paul Husbands.
"There's a view that by 2014/15, China will be the largest luxury goods market in the world, meaning that consumption in China and consumption offshore by mainland Chinese would outperform Japan, America and Europe," says the retail expert.
"It's the one large market in the world where we cannot see really an end to the market."
The rise in demand for luxury goods is not just confined to China - it is happening across Asia.
For the series Start-up Stories, I have been speaking to entrepreneurs across the continent, some of whom are looking for a slice of this expanding market.
I've heard from Ho Kwon Ping, whose luxury resort chain Banyan Tree is now exporting an Asian take on luxury to the rest of the world. And I've spoken to watch retailer Jannie Tay and chocolatier Lyn Lee, whose businesses started in Singapore but now trades across Asia.
There are bound to be many more of these stories to come. The arrival of a mass of Asian consumers is quite extraordinary. It's potentially much more significant for the global economy than the 30 year emergence of China as the world's great manufacturing centre.
As we're about to see, when people start to become consumers, what they want is a little bit of luxury.
Source: http://www.bbc.co.uk
Friday, January 21, 2011
Global Security Asia 2011 aims at protecting people, property and infrastructure
Asia-Pacific's largest and most comprehensive homeland security and counter-terrorism conference and exhibition, Global Security Asia (GSA) 2011, will be held at the Marina Bay Sands Convention Centre, Singapore from 15th to 17th March 2011. The fourth in the Series, the Conference theme, "Prevention and Protection - Safeguarding People, Property and Infrastructure", is particularly pertinent with the increasing focus especially in Asia on security with a view to preserving the economic stability and success of the region.
"How to maintain economic growth, and ensure the security of a nation's citizens, property and infrastructure will be a major topic of the GSA 2011 Conference" explained Andrew Marriott, Managing Director, GSA Exhibitions Pte Ltd.
According to research, global government current expenditure on homeland security exceeded USD 178 billion. Furthermore, the forecast expenditure for the period 2010 - 2020 is USD2.7 trillion. Research also suggests that in this period the Asia Pacific region will contribute circa 21% to the global homeland security expenditure.
Leading minds to discuss developments
GSA 2011 will be bringing together cutting edge research and state-of-the-art technology and overviews from experts in their chosen fields including Co-chairs of the Conference, Professor Alan Hatcher, chief executive officer (CEO) and Principal of The International School for Security and Explosives Education (ISSEE); Professor Andrew Tan, Professor of Social Sciences and International Studies at the University of New South Wales, Australia; Pakistan terrorism expert and author Khuram Iqbal and Caroline O'Hare, Detective Inspector and Commander of the New South Wales Police Force, Australia.
Opening the Conference with a Keynote Address will be Adam Ingram, former Member of the UK Parliament and former Minister of State for the Armed Forces and a veteran of the Northern Ireland conflict. He will be discussing the multi-dimensional impact and the implications of Homeland Security threats to a nation's economy drawing from his experience as a Minister in the UK Government and his subsequent work as an expert on global threats.
In addition, other experts including Mike Coldrick, an experienced bomb technician and intelligence officer in the field of counter-terrorism for 30 years will be examining the history of explosive devices and current developments, especially Improvised Explosive Devices (IED) and how relevant Agencies need to recognise and be proactive to these potential dangers.
Khuram Iqbal, an author and research fellow at the PAK Institute of Peace Studies (PIPS), will discuss the impact of religious fanaticism and militancy of the Tehrik-e-Taliban (TTP), a militant organization based in Pakistan. His assertion that the TTP is growing in strength and numbers through aggressive propaganda against the West and as a result is now no longer just a Pakistani problem but a global threat which will be particularly relevant to industry professionals in Southeast Asia.
Caroline O'Hare, Detective Inspector and Commander of the New South Wales Police Force will discuss the role of police in countering terrorism. She will cover how the police force in smaller nations such as Singapore can maximise their resources to meet the ever increasing challenges.
Global brands and endorsement at GSA 2011
Exhibitors participating at GSA 2011 include DHS Systems International, AM General, Motorola, Glock, General Dynamics, TJ Systems, Thales and Cobham Surveillance. These industry leaders will showcase the latest technological solutions in several areas of homeland security, including Security Screening, Biometrics, Land, Air and Sea Security, Internet and Computer Security, Intelligence and Training Methods, Chemical, Biological, Radiological, and Nuclear (CBRN) Threats, Surveillance and Security Risk Management. GSA 2011 is officially endorsed by the United States Department of Commerce and the US Department of Homeland Security, UK's Aerospace, Defence and Security (ADS) Group, the UK Trade Investment (UKTI) Defence & Security Organisation, and the Australian Trade Commission (Austrade).
The GSA Series has an established an enviable reputation as being the leading Homeland Security event in the Asia Pacific region. It is estimated that this year's Event in March will see more than 6,500 visitors including over 100 VIP delegates who will be attending the Show. These Government delegations comprising of Homeland Security experts will be coming from Malaysia, India, Philippines, Indonesia and Thailand. There will be National Pavilions from the US, UK, Australia and Singapore together with Exhibitors from Israel, Czech Republic, China, France, Germany and Switzerland.
Andrew Marriott believes the growth of the Global Security Series is due to the increasing number of threats in the Asia Pacific region. As a result this requires Governments to increase their Homeland Security expenditure to ensure their security with emphasis on biometrics, profiling, cyber-terrorism and border security. However, to be successful in meeting these threats requires international cooperation and coordination at all levels of Government and the private sector.
Source: http://www.sourcesecurity.com
"How to maintain economic growth, and ensure the security of a nation's citizens, property and infrastructure will be a major topic of the GSA 2011 Conference" explained Andrew Marriott, Managing Director, GSA Exhibitions Pte Ltd.
According to research, global government current expenditure on homeland security exceeded USD 178 billion. Furthermore, the forecast expenditure for the period 2010 - 2020 is USD2.7 trillion. Research also suggests that in this period the Asia Pacific region will contribute circa 21% to the global homeland security expenditure.
Leading minds to discuss developments
GSA 2011 will be bringing together cutting edge research and state-of-the-art technology and overviews from experts in their chosen fields including Co-chairs of the Conference, Professor Alan Hatcher, chief executive officer (CEO) and Principal of The International School for Security and Explosives Education (ISSEE); Professor Andrew Tan, Professor of Social Sciences and International Studies at the University of New South Wales, Australia; Pakistan terrorism expert and author Khuram Iqbal and Caroline O'Hare, Detective Inspector and Commander of the New South Wales Police Force, Australia.
Opening the Conference with a Keynote Address will be Adam Ingram, former Member of the UK Parliament and former Minister of State for the Armed Forces and a veteran of the Northern Ireland conflict. He will be discussing the multi-dimensional impact and the implications of Homeland Security threats to a nation's economy drawing from his experience as a Minister in the UK Government and his subsequent work as an expert on global threats.
In addition, other experts including Mike Coldrick, an experienced bomb technician and intelligence officer in the field of counter-terrorism for 30 years will be examining the history of explosive devices and current developments, especially Improvised Explosive Devices (IED) and how relevant Agencies need to recognise and be proactive to these potential dangers.
Khuram Iqbal, an author and research fellow at the PAK Institute of Peace Studies (PIPS), will discuss the impact of religious fanaticism and militancy of the Tehrik-e-Taliban (TTP), a militant organization based in Pakistan. His assertion that the TTP is growing in strength and numbers through aggressive propaganda against the West and as a result is now no longer just a Pakistani problem but a global threat which will be particularly relevant to industry professionals in Southeast Asia.
Caroline O'Hare, Detective Inspector and Commander of the New South Wales Police Force will discuss the role of police in countering terrorism. She will cover how the police force in smaller nations such as Singapore can maximise their resources to meet the ever increasing challenges.
Global brands and endorsement at GSA 2011
Exhibitors participating at GSA 2011 include DHS Systems International, AM General, Motorola, Glock, General Dynamics, TJ Systems, Thales and Cobham Surveillance. These industry leaders will showcase the latest technological solutions in several areas of homeland security, including Security Screening, Biometrics, Land, Air and Sea Security, Internet and Computer Security, Intelligence and Training Methods, Chemical, Biological, Radiological, and Nuclear (CBRN) Threats, Surveillance and Security Risk Management. GSA 2011 is officially endorsed by the United States Department of Commerce and the US Department of Homeland Security, UK's Aerospace, Defence and Security (ADS) Group, the UK Trade Investment (UKTI) Defence & Security Organisation, and the Australian Trade Commission (Austrade).
The GSA Series has an established an enviable reputation as being the leading Homeland Security event in the Asia Pacific region. It is estimated that this year's Event in March will see more than 6,500 visitors including over 100 VIP delegates who will be attending the Show. These Government delegations comprising of Homeland Security experts will be coming from Malaysia, India, Philippines, Indonesia and Thailand. There will be National Pavilions from the US, UK, Australia and Singapore together with Exhibitors from Israel, Czech Republic, China, France, Germany and Switzerland.
Andrew Marriott believes the growth of the Global Security Series is due to the increasing number of threats in the Asia Pacific region. As a result this requires Governments to increase their Homeland Security expenditure to ensure their security with emphasis on biometrics, profiling, cyber-terrorism and border security. However, to be successful in meeting these threats requires international cooperation and coordination at all levels of Government and the private sector.
Source: http://www.sourcesecurity.com
Thursday, January 20, 2011
Asian economies to lead world growth, poll suggests
Asia’s rapidly developing economies will lead global growth in 2011 despite cooling slightly from last year far outpacing the uneven recovery seen in the richer world, according to a Reuters poll.
The survey of around 500 economists across the world showed China again topping the economic expansion charts this year, as well as promising signs that the United States' economic revival will gain traction this year.
Still, most of the 13 Asia-Pacific economies covered in the poll are likely see growth cool in 2011 as policymakers there step up efforts to fight inflation, while the recovery in Europe and Japan shows few signs of gaining momentum anytime soon.
Economists expect global economic growth to slow to 4.2% this year from around 4.7% last year, before picking up slightly to 4.3% in 2012.
‘The prospects for growth at the global level this year are still pretty encouraging. The basic assumption that China effectively drives the rest of emerging Asia, which in some ways props up Western exports to these countries, is still a very pertinent theme,’ said Mark Miller, global macroeconomist at Lloyds Bank Corporate Markets.
The double digit rates of growth seen in China last year are likely slow to around 9.3% this year, while competitor India should see growth accelerate to 8.5% in the fiscal year ending March 2012.
While growth rates in the United States will fail to get anywhere near that level, economists in the latest poll sounded more optimistic about the durability of the recovery in the world’s Number One economy.
They saw US gross domestic product rising by 3% on an annualised basis in 2011, up from 2.7% in a similar poll in December and 2.3% in a November poll.
‘For our part, the upgrade in view has been due to better data, more fiscal stimulus in 2011 than we had expected, particularly the payroll tax cut which was not anticipated, and analysis that suggested households have now increased saving enough,’ said Andrew Tilton, economist at Goldman Sachs in New York.
Europe and Japan still look likely to lag. Although the eurozone’s biggest economy Germany has been performing strongly, there are few signs that will translate into a growth spurt for a bloc beset by a sovereign debt crisis and austerity measures in its periphery.
Both the eurozone and Japan, the latter mired in deflation, will likely share modest quarter on quarter growth rates of 0.5% or under for at least the next 18 months.
Central bankers in emerging market economies look likely to find taming inflation a tougher task this year, as forecasters largely upgraded their outlook for price growth from the last quarterly poll in October.
‘Later this year, Asian policymakers are going to have to be much more aggressive to get inflation under control and the consequence of that will be weaker growth,’ said Robert Subbaraman, Nomura’s Asia chief economist.
Chinese inflation is expected to quicken to 4.3% this year, a much faster build up of price pressures than expected previously. In India, where price growth which hit an annual 8.43% in December, economists expect only a gradual decline of inflation pressures.
Analysts also upped their predictions for inflation in the US and the eurozone. In Britain, inflation has spiked to almost twice the Bank of England’s 2% target that analysts say will not be met until 2012.
Unlike China, Britain’s high inflation results from a combination of tax hikes and a depreciated currency, not from asset bubbles and economic growth, which in Britain’s case will be tepid for the foreseeable future.
While austerity measures will curb growth in Britain and the eurozone, the latter must deal with another risk in the form of a sovereign debt crisis that afflicts its peripheral members like Ireland, Greece and Portugal.
While Ireland and Greece have already sought outside help for funds, a strong majority of economists reaffirmed their view that Portugal will capitulate to market pressure and be forced into accepting bailout money. Seventeen out of 22 who answered an extra question in the eurozone poll said so, and only a couple thought Spain would also suffer the same fate.
Source: http://www.investmentinternational.com
The survey of around 500 economists across the world showed China again topping the economic expansion charts this year, as well as promising signs that the United States' economic revival will gain traction this year.
Still, most of the 13 Asia-Pacific economies covered in the poll are likely see growth cool in 2011 as policymakers there step up efforts to fight inflation, while the recovery in Europe and Japan shows few signs of gaining momentum anytime soon.
Economists expect global economic growth to slow to 4.2% this year from around 4.7% last year, before picking up slightly to 4.3% in 2012.
‘The prospects for growth at the global level this year are still pretty encouraging. The basic assumption that China effectively drives the rest of emerging Asia, which in some ways props up Western exports to these countries, is still a very pertinent theme,’ said Mark Miller, global macroeconomist at Lloyds Bank Corporate Markets.
The double digit rates of growth seen in China last year are likely slow to around 9.3% this year, while competitor India should see growth accelerate to 8.5% in the fiscal year ending March 2012.
While growth rates in the United States will fail to get anywhere near that level, economists in the latest poll sounded more optimistic about the durability of the recovery in the world’s Number One economy.
They saw US gross domestic product rising by 3% on an annualised basis in 2011, up from 2.7% in a similar poll in December and 2.3% in a November poll.
‘For our part, the upgrade in view has been due to better data, more fiscal stimulus in 2011 than we had expected, particularly the payroll tax cut which was not anticipated, and analysis that suggested households have now increased saving enough,’ said Andrew Tilton, economist at Goldman Sachs in New York.
Europe and Japan still look likely to lag. Although the eurozone’s biggest economy Germany has been performing strongly, there are few signs that will translate into a growth spurt for a bloc beset by a sovereign debt crisis and austerity measures in its periphery.
Both the eurozone and Japan, the latter mired in deflation, will likely share modest quarter on quarter growth rates of 0.5% or under for at least the next 18 months.
Central bankers in emerging market economies look likely to find taming inflation a tougher task this year, as forecasters largely upgraded their outlook for price growth from the last quarterly poll in October.
‘Later this year, Asian policymakers are going to have to be much more aggressive to get inflation under control and the consequence of that will be weaker growth,’ said Robert Subbaraman, Nomura’s Asia chief economist.
Chinese inflation is expected to quicken to 4.3% this year, a much faster build up of price pressures than expected previously. In India, where price growth which hit an annual 8.43% in December, economists expect only a gradual decline of inflation pressures.
Analysts also upped their predictions for inflation in the US and the eurozone. In Britain, inflation has spiked to almost twice the Bank of England’s 2% target that analysts say will not be met until 2012.
Unlike China, Britain’s high inflation results from a combination of tax hikes and a depreciated currency, not from asset bubbles and economic growth, which in Britain’s case will be tepid for the foreseeable future.
While austerity measures will curb growth in Britain and the eurozone, the latter must deal with another risk in the form of a sovereign debt crisis that afflicts its peripheral members like Ireland, Greece and Portugal.
While Ireland and Greece have already sought outside help for funds, a strong majority of economists reaffirmed their view that Portugal will capitulate to market pressure and be forced into accepting bailout money. Seventeen out of 22 who answered an extra question in the eurozone poll said so, and only a couple thought Spain would also suffer the same fate.
Source: http://www.investmentinternational.com
Wednesday, January 19, 2011
Asian stocks climb to 31-month highs
Asian stocks rose, driving a regional benchmark index to a 2 1/2-year high, as US earnings beat analyst estimates and amid speculation that China's steps to slow inflation won't curb its economic expansion.
Samsung Electronics, the world's biggest maker of televisions, climbed 2.3 per cent in Seoul. Honda Motor, which gets about 43 per cent of its revenue from North America, climbed 0.5 per cent in Tokyo. Komatsu, a Japanese maker of earthmoving machines that earns about 19 per cent of its revenue from China, rose 1.8 per cent, while BHP Billiton, the world's largest mining company, advanced 0.8 per cent in Sydney after metal prices rallied.
The MSCI Asia Pacific Index climbed 0.9 per cent to 140.21 as of 1:32 p.m. in Tokyo after Apple and International Business Machines Corp. reported earnings that exceeded analysts' estimates, and as speculation mounted that China will tomorrow report gross domestic product growth of more than 9 per cent.
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The gauge is set to close at its highest level since June 19, 2008.
"The earnings recovery in the U.S. has been exceptional post-crisis," said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management in Sydney.
"It seems the recovery in the US economy is starting to broaden, which will support revenue and earnings growth. China's economy is robust, but it'll take at least six months of strong data to silence those calling a policy-induced hard landing."
Quarterly earnings
About five stocks rose for every three that fell on the Asia-Pacific index, with material and energy companies advancing the most among the 10 industry groups it tracks.
Of the 22 companies represented on the gauge that have reported net income for the latest quarter, 11 have exceeded analyst estimates while eight have missed them, according to data compiled by Bloomberg.
Japan's Nikkei 225 Stock Average gained 0.3 per cent.
South Korea's Kospi Index climbed 0.8 per cent, Australia's S&P/ASX 200 Index increased 0.7 per cent, and Hong Kong's Hang Seng Index added 0.8 per cent.
Futures on the Standard & Poor's 500 Index were little changed today.
The US stock index rose 0.1 per cent yesterday in New York, extending a seven-week rally, as gains in commodity producers and a pledge by European finance chiefs to support the region overshadowed lower-than-estimated profit at Citigroup Inc.
IBM, the world's largest computer-services provider, posted fourth-quarter profit and sales that topped analysts' estimates as companies spent more on computer systems and software.
The shares climbed in late trading.
Apple exceeds estimates
After the close of regular New York trading, Apple, whose Chief Executive Officer Steve Jobs is taking medical leave, reported quarterly net income of $US6.43 a share, compared with $US5.41 a share estimated on average by analysts surveyed by Bloomberg.Samsung and Hynix Semiconductor Inc., the world's two largest makers of the chips, climbed in Seoul trading.
Samsung gained 2.3 per cent to 991,000 won and Hynix rose 0.5 per cent to 27,800 won.
Honda climbed 0.3 per cent to 3,330 yen in Tokyo, and Canon Inc., a Japanese camera maker that gets about 80 per cent of its revenue abroad, gained 0.4 per cent to 4,195 yen.
"The US market is still the bellwether in the world," said Jason Teh, who helps manage about $3.1 billion at Investors Mutual Ltd. in Sydney.
"A recovering US economy is good for the world given that the nation is the world's largest consumer."
Komatsu, the world's second-largest maker of construction and mining equipment, rose 1.8 per cent to 2,555 yen in Tokyo.
Hitachi Construction Machinery Co., the world's biggest maker of giant excavators, advanced 1.1 per cent to 2,042 yen.
China growth
Government reports tomorrow will probably show inflation in China cooled to 4.6 per cent in December while the economy likely expanded 9.4 per cent in the fourth quarter, according to the median estimates of economists surveyed by Bloomberg News.
BHP Billiton, which counts China as its largest market, rose 0.8 per cent to $45.99 in Sydney after a measure of metals traded in London rose 0.5 per cent yesterday and copper futures for March delivery climbed 0.4 per cent in New York.
Rio Tinto Group, the world's third-biggest mining company, gained 0.8 per cent to $87.53. Korea Zinc Co., the world's biggest producer of refined zinc, surged 4 per cent to 315,500 won in Seoul.
In Hong Kong, China Construction Bank Corp., the nation's second-largest lender advanced 1 per cent to $HK7.19 and smaller rival Bank of China Ltd. gained 1.7 per cent to $HK4.31.
China Shipping Container Lines Co., the nation's No. 2 carrier of sea-cargo boxes, climbed 3.1 per cent to $HK3.94 before trading in its shares was suspended pending an earnings statement.
The company late yesterday said 2010 profit was "better than expected" following a recovery in the global industry.
The MSCI Asia Pacific Index rose 14.3 per cent last year, compared with gains of 12.8 per cent by the S&P 500 and 8.6 per cent by the Stoxx Europe 600 Index.
Stocks in the Asian benchmark were valued at 14.3 times estimated earnings on average at the last close, compared with 13.6 times for the S&P 500 and 11.3 times for the Stoxx 600.
"Following macro improvements in the U.S. economy, micro factors such as an earnings recovery are beginning to show," said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. "The opaque outlook for the economy is starting to clear."
Source: http://www.smh.com.au
Samsung Electronics, the world's biggest maker of televisions, climbed 2.3 per cent in Seoul. Honda Motor, which gets about 43 per cent of its revenue from North America, climbed 0.5 per cent in Tokyo. Komatsu, a Japanese maker of earthmoving machines that earns about 19 per cent of its revenue from China, rose 1.8 per cent, while BHP Billiton, the world's largest mining company, advanced 0.8 per cent in Sydney after metal prices rallied.
The MSCI Asia Pacific Index climbed 0.9 per cent to 140.21 as of 1:32 p.m. in Tokyo after Apple and International Business Machines Corp. reported earnings that exceeded analysts' estimates, and as speculation mounted that China will tomorrow report gross domestic product growth of more than 9 per cent.
Advertisement: Story continues below
The gauge is set to close at its highest level since June 19, 2008.
"The earnings recovery in the U.S. has been exceptional post-crisis," said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management in Sydney.
"It seems the recovery in the US economy is starting to broaden, which will support revenue and earnings growth. China's economy is robust, but it'll take at least six months of strong data to silence those calling a policy-induced hard landing."
Quarterly earnings
About five stocks rose for every three that fell on the Asia-Pacific index, with material and energy companies advancing the most among the 10 industry groups it tracks.
Of the 22 companies represented on the gauge that have reported net income for the latest quarter, 11 have exceeded analyst estimates while eight have missed them, according to data compiled by Bloomberg.
Japan's Nikkei 225 Stock Average gained 0.3 per cent.
South Korea's Kospi Index climbed 0.8 per cent, Australia's S&P/ASX 200 Index increased 0.7 per cent, and Hong Kong's Hang Seng Index added 0.8 per cent.
Futures on the Standard & Poor's 500 Index were little changed today.
The US stock index rose 0.1 per cent yesterday in New York, extending a seven-week rally, as gains in commodity producers and a pledge by European finance chiefs to support the region overshadowed lower-than-estimated profit at Citigroup Inc.
IBM, the world's largest computer-services provider, posted fourth-quarter profit and sales that topped analysts' estimates as companies spent more on computer systems and software.
The shares climbed in late trading.
Apple exceeds estimates
After the close of regular New York trading, Apple, whose Chief Executive Officer Steve Jobs is taking medical leave, reported quarterly net income of $US6.43 a share, compared with $US5.41 a share estimated on average by analysts surveyed by Bloomberg.Samsung and Hynix Semiconductor Inc., the world's two largest makers of the chips, climbed in Seoul trading.
Samsung gained 2.3 per cent to 991,000 won and Hynix rose 0.5 per cent to 27,800 won.
Honda climbed 0.3 per cent to 3,330 yen in Tokyo, and Canon Inc., a Japanese camera maker that gets about 80 per cent of its revenue abroad, gained 0.4 per cent to 4,195 yen.
"The US market is still the bellwether in the world," said Jason Teh, who helps manage about $3.1 billion at Investors Mutual Ltd. in Sydney.
"A recovering US economy is good for the world given that the nation is the world's largest consumer."
Komatsu, the world's second-largest maker of construction and mining equipment, rose 1.8 per cent to 2,555 yen in Tokyo.
Hitachi Construction Machinery Co., the world's biggest maker of giant excavators, advanced 1.1 per cent to 2,042 yen.
China growth
Government reports tomorrow will probably show inflation in China cooled to 4.6 per cent in December while the economy likely expanded 9.4 per cent in the fourth quarter, according to the median estimates of economists surveyed by Bloomberg News.
BHP Billiton, which counts China as its largest market, rose 0.8 per cent to $45.99 in Sydney after a measure of metals traded in London rose 0.5 per cent yesterday and copper futures for March delivery climbed 0.4 per cent in New York.
Rio Tinto Group, the world's third-biggest mining company, gained 0.8 per cent to $87.53. Korea Zinc Co., the world's biggest producer of refined zinc, surged 4 per cent to 315,500 won in Seoul.
In Hong Kong, China Construction Bank Corp., the nation's second-largest lender advanced 1 per cent to $HK7.19 and smaller rival Bank of China Ltd. gained 1.7 per cent to $HK4.31.
China Shipping Container Lines Co., the nation's No. 2 carrier of sea-cargo boxes, climbed 3.1 per cent to $HK3.94 before trading in its shares was suspended pending an earnings statement.
The company late yesterday said 2010 profit was "better than expected" following a recovery in the global industry.
The MSCI Asia Pacific Index rose 14.3 per cent last year, compared with gains of 12.8 per cent by the S&P 500 and 8.6 per cent by the Stoxx Europe 600 Index.
Stocks in the Asian benchmark were valued at 14.3 times estimated earnings on average at the last close, compared with 13.6 times for the S&P 500 and 11.3 times for the Stoxx 600.
"Following macro improvements in the U.S. economy, micro factors such as an earnings recovery are beginning to show," said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. "The opaque outlook for the economy is starting to clear."
Source: http://www.smh.com.au
Tuesday, January 18, 2011
Asia developing countries power global growth, reports UN
Bangkok - Asian developing economies, particularly China and India, were key to helping power the 2010 global economic recovery, the United Nations reported Tuesday, while noting that the developed Asia-Pacific economies had shown only 'lukewarm' recovery.
In its annual World Economic Situation and Prospects 2011 (WESP) report, the UN said that gross domestic product (GDP) in East and South Asia surged ahead by 8.4 per cent in 2010, up from 5.1 per cent in 2009.
But a 'moderate slowdown' is now expected, with GDP growth for the Asian developing economies forecast at 7.1 per cent this year and 7.3 per cent in 2012, the UN said in releasing the report.
'China and India have sustained their leading role in driving the economic recovery in Asia and the world,' the UN said, reporting 10.1 per cent GDP growth last year for China and 8.4 per cent for India.
Singapore (13 per cent) and Taiwan (9 per cent) also stood out with their GDP performance in the East and South Asia region, according to the WESP report.
'Loose monetary conditions and a recovery in export demand led to a rapid expansion in business investment,' the UN said about the Asian region's economic picture in 2010.
'Household consumption also picked up, on the back of higher wages and rising employment. While the recovery is increasingly being supported by private sector demand, government spending continued to provide significant stimulus in many countries, especially in the first half of 2010,' it added.
Looking ahead, the WESP report said 'the outlook for East Asia is favourable, although growth is expected to moderate owing to weakening global conditions and fading government stimulus.'
While the Asia/East Asia region was robust, the WESP said the developed economies of the Asia/Pacific region saw only 'a lukewarm recovery from the global economic crisis,' last year.
Japan, the world's third largest economy, started strongly in 2010, but then began to falter, with GDP growth of an estimated 2.7 per cent for the year.
Moreover, Japan's prospects look weaker with the economy projected to slow further to 1.1 per cent growth this year and 1.4 per cent in 2012, the UN predicted.
Australia, which last year showed 3.3 per cent GDP growth, is seen faring slightly better this year with a 3.7 per cent improvement, but then will ease back to a 3 per cent rate in 2012.
New Zealand, after a 2.7 per cent rise last year, is foreseen slowing down to 2.4 per cent in 2011, before improving again to a 3 per cent growth rate next year, the WESP report said.
Source: http://news.google.com.ua
In its annual World Economic Situation and Prospects 2011 (WESP) report, the UN said that gross domestic product (GDP) in East and South Asia surged ahead by 8.4 per cent in 2010, up from 5.1 per cent in 2009.
But a 'moderate slowdown' is now expected, with GDP growth for the Asian developing economies forecast at 7.1 per cent this year and 7.3 per cent in 2012, the UN said in releasing the report.
'China and India have sustained their leading role in driving the economic recovery in Asia and the world,' the UN said, reporting 10.1 per cent GDP growth last year for China and 8.4 per cent for India.
Singapore (13 per cent) and Taiwan (9 per cent) also stood out with their GDP performance in the East and South Asia region, according to the WESP report.
'Loose monetary conditions and a recovery in export demand led to a rapid expansion in business investment,' the UN said about the Asian region's economic picture in 2010.
'Household consumption also picked up, on the back of higher wages and rising employment. While the recovery is increasingly being supported by private sector demand, government spending continued to provide significant stimulus in many countries, especially in the first half of 2010,' it added.
Looking ahead, the WESP report said 'the outlook for East Asia is favourable, although growth is expected to moderate owing to weakening global conditions and fading government stimulus.'
While the Asia/East Asia region was robust, the WESP said the developed economies of the Asia/Pacific region saw only 'a lukewarm recovery from the global economic crisis,' last year.
Japan, the world's third largest economy, started strongly in 2010, but then began to falter, with GDP growth of an estimated 2.7 per cent for the year.
Moreover, Japan's prospects look weaker with the economy projected to slow further to 1.1 per cent growth this year and 1.4 per cent in 2012, the UN predicted.
Australia, which last year showed 3.3 per cent GDP growth, is seen faring slightly better this year with a 3.7 per cent improvement, but then will ease back to a 3 per cent rate in 2012.
New Zealand, after a 2.7 per cent rise last year, is foreseen slowing down to 2.4 per cent in 2011, before improving again to a 3 per cent growth rate next year, the WESP report said.
Source: http://news.google.com.ua
Monday, January 17, 2011
China's Hu Jintao: Currency system is 'product of past'
Chinese President Hu Jintao has said the international currency system dominated by the US dollar is a "product of the past".
Mr Hu also said China was taking steps to replace it with the yuan, its own currency, but acknowledged that would be a "fairly long process".
The remarks to two US newspapers come ahead of a state visit by the Chinese leader to Washington this week.
They reflect continuing tensions over currency issues between the two powers.
The remarks to the Washington Post and Wall Street Journal came in the form of written responses to questions. Mr Hu also reiterated criticism of a decision by the US Federal Reserve to inject $600bn into the economy, which some argue will weaken the dollar at the expense of other countries' exports.
"The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level," President Hu said.
'Important contribution'
Meanwhile, he disagreed with suggestions that letting the yuan appreciate in value would help China to combat inflation.
He said inflation, which reached 5.1% in November - its highest level in 28 months - was "on the whole moderate and controllable".
"We have the confidence, conditions and ability to stabilise the overall price level," he said.
Beijing has previously come under pressure over its currency from the US, which has accused China of manipulating the yuan to help boost Chinese exports.
On Sunday night, three Democratic senators announced they would introduce a new bill to increase penalties the US considers to be "currency manipulators".
However, the move is unlikely to receive support from senior Republicans - who recently took control of the House of Representatives.
The new House speaker, John Boehner, voted against another bill that failed last year that would have helped US companies challenge currency subsidies.
Currency reservations
Despite criticism of the current system, Mr Hu said he believed it would be a long time before the yuan - or renminbi (RMB) - was accepted as a global currency.
"China has made important contribution to the world economy in terms of total economic output and trade, and the RMB has played a role in the world economic development," he said.
"But making the RMB an international currency will be a fairly long process."
Some economists suggest that China's growth strategy - with its focus on exports and state-led investment - may be incompatible with Mr Hu's currency ambitions.
In order for the yuan to oust the dollar as a global reserve currency, international central banks and investors would need to be able to get their hands on huge amounts of the currency.
Yet neither of the ways in which China could supply the world with more yuan is at all appealing to Beijing, according to Michael Pettis, economist at Beijing University.
He says the country could start running big trade deficits with the rest of the world - just as the US has been doing - and finance them by selling their currency to their trade partners.
Or it could allow foreign investors to pour their money into Chinese financial assets - like shares, bonds or yuan bank accounts - matched by similar Chinese investments in the rest of the world.
But Mr Pettis warns that for the numbers to add up, China would need to do these things on an unprecedented scale, which is likely to be unpalatable to the authorities.
Either of these moves is likely to go with an increase in the yuan's value, making Chinese exporters less competitive.
And they may also fuel speculative asset bubbles in China - something that Beijing has been trying to clamp down on of late.
Source: http://www.bbc.co.uk
Mr Hu also said China was taking steps to replace it with the yuan, its own currency, but acknowledged that would be a "fairly long process".
The remarks to two US newspapers come ahead of a state visit by the Chinese leader to Washington this week.
They reflect continuing tensions over currency issues between the two powers.
The remarks to the Washington Post and Wall Street Journal came in the form of written responses to questions. Mr Hu also reiterated criticism of a decision by the US Federal Reserve to inject $600bn into the economy, which some argue will weaken the dollar at the expense of other countries' exports.
"The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level," President Hu said.
'Important contribution'
Meanwhile, he disagreed with suggestions that letting the yuan appreciate in value would help China to combat inflation.
He said inflation, which reached 5.1% in November - its highest level in 28 months - was "on the whole moderate and controllable".
"We have the confidence, conditions and ability to stabilise the overall price level," he said.
Beijing has previously come under pressure over its currency from the US, which has accused China of manipulating the yuan to help boost Chinese exports.
On Sunday night, three Democratic senators announced they would introduce a new bill to increase penalties the US considers to be "currency manipulators".
However, the move is unlikely to receive support from senior Republicans - who recently took control of the House of Representatives.
The new House speaker, John Boehner, voted against another bill that failed last year that would have helped US companies challenge currency subsidies.
Currency reservations
Despite criticism of the current system, Mr Hu said he believed it would be a long time before the yuan - or renminbi (RMB) - was accepted as a global currency.
"China has made important contribution to the world economy in terms of total economic output and trade, and the RMB has played a role in the world economic development," he said.
"But making the RMB an international currency will be a fairly long process."
Some economists suggest that China's growth strategy - with its focus on exports and state-led investment - may be incompatible with Mr Hu's currency ambitions.
In order for the yuan to oust the dollar as a global reserve currency, international central banks and investors would need to be able to get their hands on huge amounts of the currency.
Yet neither of the ways in which China could supply the world with more yuan is at all appealing to Beijing, according to Michael Pettis, economist at Beijing University.
He says the country could start running big trade deficits with the rest of the world - just as the US has been doing - and finance them by selling their currency to their trade partners.
Or it could allow foreign investors to pour their money into Chinese financial assets - like shares, bonds or yuan bank accounts - matched by similar Chinese investments in the rest of the world.
But Mr Pettis warns that for the numbers to add up, China would need to do these things on an unprecedented scale, which is likely to be unpalatable to the authorities.
Either of these moves is likely to go with an increase in the yuan's value, making Chinese exporters less competitive.
And they may also fuel speculative asset bubbles in China - something that Beijing has been trying to clamp down on of late.
Source: http://www.bbc.co.uk
Friday, January 14, 2011
Indian PM unveils steps to curb food price inflation
India has announced a slew of measures to curb spiralling food prices.
The prime minister's office said the government would review import and export of essential commodities and sell onions at a restricted price.
Experts, however, say the measures are too little, too late and a repeat of already failed steps.
Meanwhile, government data released on Friday showed that the wholesale price index (WPI) had risen to 8.43% in December - the highest in a year.
This was attributed to the soaring price of vegetables, milk and other staples which took food inflation to 18.32% last month - the highest in more than a year.
Admitting that food prices had risen to "unacceptable" levels, the authorities said it was proving difficult to manage inflation.
The price of onions, a staple food used in many dishes, has risen dramatically - even prompting India's government to approach long-time rival Pakistan for help.
A kilogram of onions, which usually costs 20 rupees in India, went up to 85 rupees (£1.20; $1.87) last month. It is now about 60-65 rupees a kilo after government intervention.
The government said state-run stores would sell the vegetable at 35 rupees a kilo. The expected arrival of 1,000 tonnes of onions from Pakistan soon would also ease the situation, it said.
The price rise has been blamed on unusually heavy rains in the bulk-producing western states of Maharashtra and Gujarat and in southern states, as well as on hoarders and speculators.
The ban on export of onions, pulses, cooking oil and cheaper varieties of rice will continue. State agencies would also retail edible oil and pulses at a reasonable rate, the authorities said.
Economists said the government had shied away from taking bold steps and that the steps would be unlikely to help much.
Discontent over food inflation has been a major headache for the government.
High prices of essential commodities such as onions have previously sparked unrest and helped bring down the national government in 2004.
Source: BBC
www.bbc.co.uk
The prime minister's office said the government would review import and export of essential commodities and sell onions at a restricted price.
Experts, however, say the measures are too little, too late and a repeat of already failed steps.
Meanwhile, government data released on Friday showed that the wholesale price index (WPI) had risen to 8.43% in December - the highest in a year.
This was attributed to the soaring price of vegetables, milk and other staples which took food inflation to 18.32% last month - the highest in more than a year.
Admitting that food prices had risen to "unacceptable" levels, the authorities said it was proving difficult to manage inflation.
The price of onions, a staple food used in many dishes, has risen dramatically - even prompting India's government to approach long-time rival Pakistan for help.
A kilogram of onions, which usually costs 20 rupees in India, went up to 85 rupees (£1.20; $1.87) last month. It is now about 60-65 rupees a kilo after government intervention.
The government said state-run stores would sell the vegetable at 35 rupees a kilo. The expected arrival of 1,000 tonnes of onions from Pakistan soon would also ease the situation, it said.
The price rise has been blamed on unusually heavy rains in the bulk-producing western states of Maharashtra and Gujarat and in southern states, as well as on hoarders and speculators.
The ban on export of onions, pulses, cooking oil and cheaper varieties of rice will continue. State agencies would also retail edible oil and pulses at a reasonable rate, the authorities said.
Economists said the government had shied away from taking bold steps and that the steps would be unlikely to help much.
Discontent over food inflation has been a major headache for the government.
High prices of essential commodities such as onions have previously sparked unrest and helped bring down the national government in 2004.
Source: BBC
www.bbc.co.uk
Thursday, January 13, 2011
World Bank Predicts Thailand's 2011 Economic Growth To Be Lowest In Asia
BANGKOK, Jan 13 (Bernama) -- In its world economic outlook report, the World Bank predicts that the Thai economy will grow by only 3.2 percent this year, the lowest growth in Asia in five years and drop from its 7.5 percent expansion which was the highest growth in Asia last year, Thai News Agency (TNA) reported.
Thailand-based World Bank economist Frederico Gil Sander said the Thai economy grew at slower paces in the third and the fourth quarters of 2010.
Besides, Thai tourism did not fully recover because tourists from the United States and Europe did not return to Thailand.
That caused the Thai economy to grow only by 5 percent during the period and its growth rate will thus be the lowest in Asia this year.
However, Sander pointed out that a general election this year would stimulate local consumption and the new nine-point Pracha Wiwat social welfare scheme of the Thai government would raise local spending.
If the Thai politics is more stable or sends a positive signal, the World Bank will raise the expected Thai economic growth rate to over 4.2 percent next year.
Regarding risk factors of the Thai economy this year, Mr Sander said that concerns about public debts in Europe persisted.
If the problem gets worse, it will have negative impacts on the economy. Besides, inflation is rising faster than expected.
If the Bank of Thailand raises its repurchase rate too fast, that will stall local demands and affect the overall economy.
Source: Bernama.com
www.bernama.com
Thailand-based World Bank economist Frederico Gil Sander said the Thai economy grew at slower paces in the third and the fourth quarters of 2010.
Besides, Thai tourism did not fully recover because tourists from the United States and Europe did not return to Thailand.
That caused the Thai economy to grow only by 5 percent during the period and its growth rate will thus be the lowest in Asia this year.
However, Sander pointed out that a general election this year would stimulate local consumption and the new nine-point Pracha Wiwat social welfare scheme of the Thai government would raise local spending.
If the Thai politics is more stable or sends a positive signal, the World Bank will raise the expected Thai economic growth rate to over 4.2 percent next year.
Regarding risk factors of the Thai economy this year, Mr Sander said that concerns about public debts in Europe persisted.
If the problem gets worse, it will have negative impacts on the economy. Besides, inflation is rising faster than expected.
If the Bank of Thailand raises its repurchase rate too fast, that will stall local demands and affect the overall economy.
Source: Bernama.com
www.bernama.com
Wednesday, January 12, 2011
China bans German pork and eggs in dioxin scare
China has banned imports of German pork and egg goods after tests last week had revealed levels of dioxin at 77 times the permitted level in animal feed.
The country has ceased imports of "German-produced edible pork and egg products" China's product safety watchdog said in a statement.
The authorities will also inspect goods shipped from Germany before the ban was imposed to see if they are safe.
Previously only South Korea had banned German pork imports.
Slovakia had halted sales of German eggs and poultry meat, even though Germany has said there is no immediate risk to human health.
The Chinese ban was effective from 11 January, said the country's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).
Shipments already on the way to China and that arrive after 11 January will have to be tested for dioxin.
Oil mix-up
German Agriculture Minister Ilse Aigner wants to look at tightening regulations in order to prevent a repeat of the current situation.
The scare started after oils intended for bio-fuel had become mixed with oil destined for animal feed.
Some 4,700 German farms were banned from making deliveries after tests at the Harles und Jentzsch plant in the state of Schleswig-Holstein, which produces fats for use in industrial processes as well as to enrich animal feed.
Most of these farms have been since been given the all-clear.
Dioxins are toxins formed by industrial processes and waste burning.
They have been shown to contribute to higher cancer rates and to affect pregnant women.
Source: BBC
http://www.bbc.co.uk
The country has ceased imports of "German-produced edible pork and egg products" China's product safety watchdog said in a statement.
The authorities will also inspect goods shipped from Germany before the ban was imposed to see if they are safe.
Previously only South Korea had banned German pork imports.
Slovakia had halted sales of German eggs and poultry meat, even though Germany has said there is no immediate risk to human health.
The Chinese ban was effective from 11 January, said the country's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).
Shipments already on the way to China and that arrive after 11 January will have to be tested for dioxin.
Oil mix-up
German Agriculture Minister Ilse Aigner wants to look at tightening regulations in order to prevent a repeat of the current situation.
The scare started after oils intended for bio-fuel had become mixed with oil destined for animal feed.
Some 4,700 German farms were banned from making deliveries after tests at the Harles und Jentzsch plant in the state of Schleswig-Holstein, which produces fats for use in industrial processes as well as to enrich animal feed.
Most of these farms have been since been given the all-clear.
Dioxins are toxins formed by industrial processes and waste burning.
They have been shown to contribute to higher cancer rates and to affect pregnant women.
Source: BBC
http://www.bbc.co.uk
Tuesday, January 11, 2011
Japan in pledge to buy eurozone bonds issued by EFSF
Japan is to buy bonds from a eurozone rescue fund to help pay for the Irish Republic's bail-out.
Finance minister Yoshihiko Noda said Japan should help to boost confidence in the bonds issued by the European Financial Stability Facility (EFSF).
It comes a day after Portuguese bond yields hit a new high.
Japan joins China, which has already said it is willing to help European economies exposed to a debt, including Spain, Greece and Portugal.
"It is appropriate for Japan, as a major economy, to buy some of the EFSF bonds" to help boost confidence in Europe's efforts, Mr Noda said.
"We're thinking about buying more than 20% of the amount" of EFSF securities to be issued in the initial round, he said.
Foreign reserves
EU members are planning a bond issuance programme of up to 440bn euros ($569bn; £366bn).
The fund is designed to shore up the Irish Republic and other indebted countries.
The first stage of the programme will issue bonds worth about 3bn to 5bn euros at the end of the month.
Japan is to use euros in its foreign reserves to buy the bonds, indicating there will not be large fresh buying of the euros.
The Nikkei business daily said Tokyo would buy about 100bn yen of bonds, (930m euros).
Meanwhile, analysts believe that while Europe could support Portugal as well as the Irish Republic, a bail-out of Spain would stretch the existing fund.
Greece was the first eurozone nation to take a bail-out when a three-year 110bn-euro deal was agreed last year.
The Irish Republic's 85bn-euro bail-out package was agreed last month.
Source: BBC
www.bbc.co.uk
Finance minister Yoshihiko Noda said Japan should help to boost confidence in the bonds issued by the European Financial Stability Facility (EFSF).
It comes a day after Portuguese bond yields hit a new high.
Japan joins China, which has already said it is willing to help European economies exposed to a debt, including Spain, Greece and Portugal.
"It is appropriate for Japan, as a major economy, to buy some of the EFSF bonds" to help boost confidence in Europe's efforts, Mr Noda said.
"We're thinking about buying more than 20% of the amount" of EFSF securities to be issued in the initial round, he said.
Foreign reserves
EU members are planning a bond issuance programme of up to 440bn euros ($569bn; £366bn).
The fund is designed to shore up the Irish Republic and other indebted countries.
The first stage of the programme will issue bonds worth about 3bn to 5bn euros at the end of the month.
Japan is to use euros in its foreign reserves to buy the bonds, indicating there will not be large fresh buying of the euros.
The Nikkei business daily said Tokyo would buy about 100bn yen of bonds, (930m euros).
Meanwhile, analysts believe that while Europe could support Portugal as well as the Irish Republic, a bail-out of Spain would stretch the existing fund.
Greece was the first eurozone nation to take a bail-out when a three-year 110bn-euro deal was agreed last year.
The Irish Republic's 85bn-euro bail-out package was agreed last month.
Source: BBC
www.bbc.co.uk
Monday, January 10, 2011
China sees trade surplus narrow as imports rise
China's trade surplus shrank to an eight month low in December, official figures show.
Imports increased by 25.6% on the same month a year earlier, leaving China with a surplus of $13.1bn ($8.4bn).
Exports were up 17.9%, much slower than November's 34.9% rise.
Analysts said the data may give Beijing grounds to fend off US pressure for faster currency appreciation ahead of Chinese President Hu Jintao's visit to the United States next week.
"Imports are much stronger than we have expected, indicating that the domestic investment and internal demand are mainly pushing up domestic consumption," said Wang Han, an economist at advisory firm CEBM in Shanghai.
Figures showed that the surplus for 2010 as a whole had fallen for a second consecutive year, down 7% on 2009 levels to $183.1bn.
Many US politicians and economists accuse China of manipulating the value of the yuan in order to boost its net exports at the expense of its trading partners.
A bill is set to go before the Senate that would call for retaliatory trade sanctions against countries such as China that intervene to weaken their currencies.
China relaxed the yuan's fixed exchange rate against the dollar in June, but since then it has been allowed to appreciate by less than 3%.
Source: http://www.bbc.co.uk
Imports increased by 25.6% on the same month a year earlier, leaving China with a surplus of $13.1bn ($8.4bn).
Exports were up 17.9%, much slower than November's 34.9% rise.
Analysts said the data may give Beijing grounds to fend off US pressure for faster currency appreciation ahead of Chinese President Hu Jintao's visit to the United States next week.
"Imports are much stronger than we have expected, indicating that the domestic investment and internal demand are mainly pushing up domestic consumption," said Wang Han, an economist at advisory firm CEBM in Shanghai.
Figures showed that the surplus for 2010 as a whole had fallen for a second consecutive year, down 7% on 2009 levels to $183.1bn.
Many US politicians and economists accuse China of manipulating the value of the yuan in order to boost its net exports at the expense of its trading partners.
A bill is set to go before the Senate that would call for retaliatory trade sanctions against countries such as China that intervene to weaken their currencies.
China relaxed the yuan's fixed exchange rate against the dollar in June, but since then it has been allowed to appreciate by less than 3%.
Source: http://www.bbc.co.uk
Sunday, January 9, 2011
China to lead Asian economic slowdown
NEW YORK, Jan 6 (Reuters) - China will lead an economic slowdown in Asia this year -- but that's good news for investors, as it should avoid bigger inflation problems in the region, fund managing company Amundi said on Thursday.
Markets are expected to be choppy in 2011 as Beijing adjusts policy to fight inflation, but a foreseeable end to its monetary tightening cycle later this year could boost the return profile of Greater China's equity market, Amundi said.
"Investors should welcome, not fear, a slowing Chinese economy in 2011," Ray Jovanovich, who helps manage more than 650 billion euros at the fund manager, said in a letter to investors.
Asia is on the opposite side of most developed economies such as the United States, where deflation remains the main threat, Jovanovich said.
"A gradually moderating economy (in Asia) is exactly the prescription warranted to arrest the harmful side effects associated with the current inflation threat. We view a slowing economy as a positive signal for China; along with the rest of the Asian region, and the world, for that matter," he said.
China and India have been raising interest rates to stop an inflation spiral which threatens to cause a spike in prices of raw materials and energy.
More anti-inflation measures are expected in 2011, both in terms of monetary and fiscal policies, along with a renewed push for administrative measures, the fund manager forecast.
Amundi, which combines the asset management business of French banks Credit Agricole and Societe Generale, maintains a neutral portfolio position in China and a "significant" overweight stance towards Hong Kong.
"Monetary conditions in Hong Kong's banking system continue to be significantly boosted by both the acceleration in Renminbi internationalization policies and QE2 from America," Jovanovich said.
"We anticipate double-digit monetary base and credit growth in the Hong Kong banking system in 2011, which would eventually lead to further re-rating of risk assets such as equity and property markets."
The firm downgraded its asset allocation to India to neutral from significant overweight on worries that lower GDP growth and earnings estimates for the country still have to be priced in by markets.
It is also "constructive" towards South Korea, despite tensions in the peninsula, as it sees the won as "fundamentally undervalued."
Market performance in 2011 should be driven by key investment themes such as domestic consumption, machinery and capital goods, along with tourism, Jovanovich said, pointing to sectors that would benefit from medium-term secular growth trends.
He also forecasts public housing and healthcare activities will rapidly gain prominence in China in 2011.
By Walter Brandimarte
Source: www.reuters.com
Markets are expected to be choppy in 2011 as Beijing adjusts policy to fight inflation, but a foreseeable end to its monetary tightening cycle later this year could boost the return profile of Greater China's equity market, Amundi said.
"Investors should welcome, not fear, a slowing Chinese economy in 2011," Ray Jovanovich, who helps manage more than 650 billion euros at the fund manager, said in a letter to investors.
Asia is on the opposite side of most developed economies such as the United States, where deflation remains the main threat, Jovanovich said.
"A gradually moderating economy (in Asia) is exactly the prescription warranted to arrest the harmful side effects associated with the current inflation threat. We view a slowing economy as a positive signal for China; along with the rest of the Asian region, and the world, for that matter," he said.
China and India have been raising interest rates to stop an inflation spiral which threatens to cause a spike in prices of raw materials and energy.
More anti-inflation measures are expected in 2011, both in terms of monetary and fiscal policies, along with a renewed push for administrative measures, the fund manager forecast.
Amundi, which combines the asset management business of French banks Credit Agricole and Societe Generale, maintains a neutral portfolio position in China and a "significant" overweight stance towards Hong Kong.
"Monetary conditions in Hong Kong's banking system continue to be significantly boosted by both the acceleration in Renminbi internationalization policies and QE2 from America," Jovanovich said.
"We anticipate double-digit monetary base and credit growth in the Hong Kong banking system in 2011, which would eventually lead to further re-rating of risk assets such as equity and property markets."
The firm downgraded its asset allocation to India to neutral from significant overweight on worries that lower GDP growth and earnings estimates for the country still have to be priced in by markets.
It is also "constructive" towards South Korea, despite tensions in the peninsula, as it sees the won as "fundamentally undervalued."
Market performance in 2011 should be driven by key investment themes such as domestic consumption, machinery and capital goods, along with tourism, Jovanovich said, pointing to sectors that would benefit from medium-term secular growth trends.
He also forecasts public housing and healthcare activities will rapidly gain prominence in China in 2011.
By Walter Brandimarte
Source: www.reuters.com
Thursday, January 6, 2011
Asian Stocks Rise on Optimism for U.S. Economic Recovery; Honda Advances
Asian stocks rose, with the regional benchmark index advancing for the eighth day in nine, as a stronger dollar boosted earnings prospects for exporters and reports in the U.S. signaled a broadening of the economic recovery.
Honda Motor Co., Japan’s No. 2 automaker by sales that counts the U.S. as its biggest market, gained 1.3 percent in Tokyo. Hyundai Motor Co., South Korea’s biggest carmaker, rose 2.4 percent in Seoul. Canon Inc., a Japanese camera maker that generates about 80 percent of its revenue overseas, rose 1.2 percent after the dollar surged against the yen, boosting the outlook for export earnings. Mitsui & Co., which gets about 40 percent of gross profit from commodities, advanced 2.1 percent after crude oil and copper futures increased.
“There are mounting expectations about an economic recovery in the U.S.,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “Investors have their eyes on the favorable factors. Excess liquidity is boosting demand for commodities.”
The MSCI Asia Pacific Index climbed 0.4 percent to 137.71 as of 11:38 a.m. in Tokyo. Five stocks advanced for every four that dropped on the gauge. The index rose 14 percent last year, extending a 34 percent increase in 2009, as positive global economic data and corporate profits outweighed concerns about Europe’s debt crisis and China’s steps to curb inflation.
Japan’s Nikkei 225 Stock Average increased 1.2 percent. Singapore’s Straits Times index gained 0.3 percent and Hong Kong’s Hang Seng Index was little changed. China’s Shanghai Composite Index dropped 0.7 percent and Australia’s S&P/ASX 200 Index slipped 0.4 percent.
U.S. Services, Jobs
Futures on the Standard & Poor’s 500 Index were little changed today. The index rose 0.5 percent in New York yesterday to its highest level since September 2008.
The U.S. Institute for Supply Management said yesterday that its non-factory index, which covers about 90 percent of the economy, rose to 57.1 in December, exceeding the median forecast of economists surveyed by Bloomberg News and the fastest expansion since May 2006. A reading higher than 50 signals growth. ADP Employer Services said yesterday that U.S. companies added 297,000 jobs last month, almost triple the median economist estimate.
Gauges of consumer discretionary stocks as well as industrial and information technology companies had the biggest increase among the 10 industry in the MSCI Asia Pacific Index.
Honda climbed 1.3 percent to 3,245 yen in Tokyo. Toyota Motor Corp., the world’s biggest carmaker, advanced 2.3 percent to 3,370 yen. Hyundai Motor gained 2.4 percent to 193,500 won in Seoul.
Auto Rally
Asian carmarkers also gained after the Federal Chamber of Automotive Industries in Australia reported sales of new vehicles increased 10 percent in 2010 to 1.036 million from the previous year.
Mazda Motor Corp., Japan’s fifth biggest automaker by sales, advanced 2.5 percent to 248 yen. The company sold 239,709 vehicles in China last year, an increase of 33 percent from 2009, according to a statement on its website.
Fuji Heavy Industries Ltd., owner of the Subaru auto brand, climbed 3.8 percent to 683 yen after Goldman Sachs Group Inc, increased its rating to “buy” from “neutral.”
Japanese exporters also increased after the dollar gained the most in three months against the yen yesterday in New York, advancing to as much as 83.38, the highest level since Dec. 23. A stronger dollar boosts the value of U.S. income at Japanese companies when revenue is repatriated.
Canon, the world’s biggest camera maker, gained 1.2 percent to 4,265 yen in Tokyo. Nintendo Co., the maker Wii gaming consoles, climbed 2 percent to 23,330 yen. Fanuc Corp., Japan’s largest maker of industrial robots, advanced 2.6 percent to 12,960 yen.
‘Business Confidence’
Nikon Corp., Japan’s second biggest camera maker by sales, increased 4.4 percent to 1,834 yen. The company expects operating profit from its precision equipment operations will reach 28 billion yen in fiscal year 2012, seven times the amount forecast for the current year, the Nikkei newspaper reported.
“Investors are taking business confidence as being on a recovery track because economic measures are good in general,” said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. “A global pickup in business sentiment is boosting actual demand for commodities.”
Mitsui & Co. gained 2.1 percent to 1,418 yen. Mitsubishi Corp., which gets about 40 percent of sales from commodities, increased 2.2 percent to 2,380 yen. Woodside Petroleum Ltd., Australia’s second-biggest oil producer, climbed 1.1 percent to A$42.83.
Crude oil for February delivery increased to $90.30 a barrel in New York yesterday. Copper futures for March delivery rose 0.9 percent to close at $4.408 a pound yesterday.
Shares on MSCI Asia Pacific Index were valued at 14.1 times estimated earnings on average at yesterday’s close, compared with 13.5 times for the S&P 500 and 11.1 times for the Stoxx 600.
Source: http://www.bloomberg.com
Honda Motor Co., Japan’s No. 2 automaker by sales that counts the U.S. as its biggest market, gained 1.3 percent in Tokyo. Hyundai Motor Co., South Korea’s biggest carmaker, rose 2.4 percent in Seoul. Canon Inc., a Japanese camera maker that generates about 80 percent of its revenue overseas, rose 1.2 percent after the dollar surged against the yen, boosting the outlook for export earnings. Mitsui & Co., which gets about 40 percent of gross profit from commodities, advanced 2.1 percent after crude oil and copper futures increased.
“There are mounting expectations about an economic recovery in the U.S.,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “Investors have their eyes on the favorable factors. Excess liquidity is boosting demand for commodities.”
The MSCI Asia Pacific Index climbed 0.4 percent to 137.71 as of 11:38 a.m. in Tokyo. Five stocks advanced for every four that dropped on the gauge. The index rose 14 percent last year, extending a 34 percent increase in 2009, as positive global economic data and corporate profits outweighed concerns about Europe’s debt crisis and China’s steps to curb inflation.
Japan’s Nikkei 225 Stock Average increased 1.2 percent. Singapore’s Straits Times index gained 0.3 percent and Hong Kong’s Hang Seng Index was little changed. China’s Shanghai Composite Index dropped 0.7 percent and Australia’s S&P/ASX 200 Index slipped 0.4 percent.
U.S. Services, Jobs
Futures on the Standard & Poor’s 500 Index were little changed today. The index rose 0.5 percent in New York yesterday to its highest level since September 2008.
The U.S. Institute for Supply Management said yesterday that its non-factory index, which covers about 90 percent of the economy, rose to 57.1 in December, exceeding the median forecast of economists surveyed by Bloomberg News and the fastest expansion since May 2006. A reading higher than 50 signals growth. ADP Employer Services said yesterday that U.S. companies added 297,000 jobs last month, almost triple the median economist estimate.
Gauges of consumer discretionary stocks as well as industrial and information technology companies had the biggest increase among the 10 industry in the MSCI Asia Pacific Index.
Honda climbed 1.3 percent to 3,245 yen in Tokyo. Toyota Motor Corp., the world’s biggest carmaker, advanced 2.3 percent to 3,370 yen. Hyundai Motor gained 2.4 percent to 193,500 won in Seoul.
Auto Rally
Asian carmarkers also gained after the Federal Chamber of Automotive Industries in Australia reported sales of new vehicles increased 10 percent in 2010 to 1.036 million from the previous year.
Mazda Motor Corp., Japan’s fifth biggest automaker by sales, advanced 2.5 percent to 248 yen. The company sold 239,709 vehicles in China last year, an increase of 33 percent from 2009, according to a statement on its website.
Fuji Heavy Industries Ltd., owner of the Subaru auto brand, climbed 3.8 percent to 683 yen after Goldman Sachs Group Inc, increased its rating to “buy” from “neutral.”
Japanese exporters also increased after the dollar gained the most in three months against the yen yesterday in New York, advancing to as much as 83.38, the highest level since Dec. 23. A stronger dollar boosts the value of U.S. income at Japanese companies when revenue is repatriated.
Canon, the world’s biggest camera maker, gained 1.2 percent to 4,265 yen in Tokyo. Nintendo Co., the maker Wii gaming consoles, climbed 2 percent to 23,330 yen. Fanuc Corp., Japan’s largest maker of industrial robots, advanced 2.6 percent to 12,960 yen.
‘Business Confidence’
Nikon Corp., Japan’s second biggest camera maker by sales, increased 4.4 percent to 1,834 yen. The company expects operating profit from its precision equipment operations will reach 28 billion yen in fiscal year 2012, seven times the amount forecast for the current year, the Nikkei newspaper reported.
“Investors are taking business confidence as being on a recovery track because economic measures are good in general,” said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. “A global pickup in business sentiment is boosting actual demand for commodities.”
Mitsui & Co. gained 2.1 percent to 1,418 yen. Mitsubishi Corp., which gets about 40 percent of sales from commodities, increased 2.2 percent to 2,380 yen. Woodside Petroleum Ltd., Australia’s second-biggest oil producer, climbed 1.1 percent to A$42.83.
Crude oil for February delivery increased to $90.30 a barrel in New York yesterday. Copper futures for March delivery rose 0.9 percent to close at $4.408 a pound yesterday.
Shares on MSCI Asia Pacific Index were valued at 14.1 times estimated earnings on average at yesterday’s close, compared with 13.5 times for the S&P 500 and 11.1 times for the Stoxx 600.
Source: http://www.bloomberg.com
Wednesday, January 5, 2011
Asia to lead global economic recovery in 2011: HK banker
HONG KONG, Jan. 5, 2011 (Kyodo News International) -- Asia will likely see better economic recovery in 2011 as the United States and European countries continue to struggle, while the liberalization of China's currency will remain the topic of greatest concern, veteran Hong Kong banker Benjamin Hung said Wednesday.
Briefing the media on the upcoming Asian Financial (NYSE:DYP) Forum to be held here, Hung, the chief executive officer of Standard Chartered Bank (Hong Kong), predicted the global economy will recover on a ''steady but gradual'' basis, with Western economies growing below 2 percent and Asia showing a strong growth of 6-7 percent, powered by China.
''The road remains bumpy and the market will remain volatile, but I do think the world should hopefully be regaining more confidence and going through more gradual and steady pace of economic growth,'' Hung said.
The United States has been pressuring China to let the yuan appreciate significantly to offset trade imbalances between the countries. Beijing has insisted on a controlled currency rate rise to prevent negative impact on its export.
''The whole process of liberalization of renminbi (yuan) will probably be one of the biggest developments in the next decade. China is the second largest economic body in the world which is very connected with the world through trade, textiles, etc., but not connected with the world by its currency financially,'' Hung said.
The annual forum, to be held on Jan. 17-18, has invited speakers from financial sector and government officials of different countries including Japan.
Three dozen representatives from 25 Japanese companies mainly of venture capital and private equity firms will be attending the forum in a mission led by Japan's Ministry of Economy, Trade and Industry for the first time.
''Japanese investors are very conservative and are reluctant to invest their money in these challenging enterprises,'' said Minoru Suzuki, director general of the Japan External Trade Organization in Hong Kong.
Suzuki said the forum can help these small companies draw investment from Asian investors, in light of an anticipated economic slowdown in 2011 during which Japan's economic growth is forecast to drop from around 3 percent last year to 1.5 percent this year, as the rising currency exchange rate is hurting export.
Source: www.istockanalyst.com
Briefing the media on the upcoming Asian Financial (NYSE:DYP) Forum to be held here, Hung, the chief executive officer of Standard Chartered Bank (Hong Kong), predicted the global economy will recover on a ''steady but gradual'' basis, with Western economies growing below 2 percent and Asia showing a strong growth of 6-7 percent, powered by China.
''The road remains bumpy and the market will remain volatile, but I do think the world should hopefully be regaining more confidence and going through more gradual and steady pace of economic growth,'' Hung said.
The United States has been pressuring China to let the yuan appreciate significantly to offset trade imbalances between the countries. Beijing has insisted on a controlled currency rate rise to prevent negative impact on its export.
''The whole process of liberalization of renminbi (yuan) will probably be one of the biggest developments in the next decade. China is the second largest economic body in the world which is very connected with the world through trade, textiles, etc., but not connected with the world by its currency financially,'' Hung said.
The annual forum, to be held on Jan. 17-18, has invited speakers from financial sector and government officials of different countries including Japan.
Three dozen representatives from 25 Japanese companies mainly of venture capital and private equity firms will be attending the forum in a mission led by Japan's Ministry of Economy, Trade and Industry for the first time.
''Japanese investors are very conservative and are reluctant to invest their money in these challenging enterprises,'' said Minoru Suzuki, director general of the Japan External Trade Organization in Hong Kong.
Suzuki said the forum can help these small companies draw investment from Asian investors, in light of an anticipated economic slowdown in 2011 during which Japan's economic growth is forecast to drop from around 3 percent last year to 1.5 percent this year, as the rising currency exchange rate is hurting export.
Source: www.istockanalyst.com
Tuesday, January 4, 2011
Oil mixed in Asia on improving US economy
Oil was mixed in Asia today on strong economic data suggesting an improvement in the health of the US economy.
New York's main contract, light sweet crude for February delivery, dipped eight cents to $91.47 a barrel. Brent North Sea crude for February was up three cents at $94.87.
The Institute for Supply Management said yesterday that US manufacturing activity grew for the 17th month in a row in December, bolstering confidence that the US economic recovery is gaining momentum.
The Commerce Department also said that construction spending rose by 0.4% in November to its highest point in five months. The US is the world's biggest oil-consuming nation.
Analysts said that oil sentiment has turned decidedly bullish, partly driven by unusually cold weather, but more due to an increasingly optimistic consensus view on the 2011 economic performance, especially for the US.
Source: www.rte.ie
New York's main contract, light sweet crude for February delivery, dipped eight cents to $91.47 a barrel. Brent North Sea crude for February was up three cents at $94.87.
The Institute for Supply Management said yesterday that US manufacturing activity grew for the 17th month in a row in December, bolstering confidence that the US economic recovery is gaining momentum.
The Commerce Department also said that construction spending rose by 0.4% in November to its highest point in five months. The US is the world's biggest oil-consuming nation.
Analysts said that oil sentiment has turned decidedly bullish, partly driven by unusually cold weather, but more due to an increasingly optimistic consensus view on the 2011 economic performance, especially for the US.
Source: www.rte.ie
Monday, January 3, 2011
Pace of China manufacturing growth eases
The pace of growth among China's manufacturers eased last month but output continued to expand, figures suggest.
The China Federation of Logistics and Purchasing said its purchasing managers index fell to 53.9 in December, from 55.2 in November and 54.7 in October.
It was the first time in five months that the measure had fallen.
Monthly PMI (Purchasing Manager Index) readings have stayed above 50, indicating expansion, for 22 months.
Analysts maintain that strong domestic demand has continued to offset weakness in some of the country's export markets such as the US and Europe.
Chinese authorities have been taking steps to try to control growth in a bid to control inflation - which in November hit a 28-month high.
On Christmas day, Beijing raised key interest rates, the second such move in less than three months.
And the amount of money banks keep in reserve has also been restricted to try to reduce bank lending levels.
The latest data showed that China's economy grew at an annual pace of 9.6% in the three months to the end of September from 11.9% in the first quarter of this year.
Source: BBC
www.bbc.co.uk
The China Federation of Logistics and Purchasing said its purchasing managers index fell to 53.9 in December, from 55.2 in November and 54.7 in October.
It was the first time in five months that the measure had fallen.
Monthly PMI (Purchasing Manager Index) readings have stayed above 50, indicating expansion, for 22 months.
Analysts maintain that strong domestic demand has continued to offset weakness in some of the country's export markets such as the US and Europe.
Chinese authorities have been taking steps to try to control growth in a bid to control inflation - which in November hit a 28-month high.
On Christmas day, Beijing raised key interest rates, the second such move in less than three months.
And the amount of money banks keep in reserve has also been restricted to try to reduce bank lending levels.
The latest data showed that China's economy grew at an annual pace of 9.6% in the three months to the end of September from 11.9% in the first quarter of this year.
Source: BBC
www.bbc.co.uk
Saturday, January 1, 2011
Asia's unstable rise
CHINA - The current turmoil on the Korean peninsula demonstrates this vividly. An unresolved relic of the Cold War, Pyongyang's nuclear ambitions have been difficult to deal with despite the diplomatic efforts of the six-party talks.
But it isn't nuclear warheads that have created the current turmoil. A torpedo sank the South Korean Navy vessel Cheonan in March, and on November 20 artillery shells pummelled South Korean military and civilian installations on the disputed island of Yeongpyeong. Standard weapons are more than enough to create a new sense of uncertainty. Nothing done since March has rebuilt stability.
Never mind that South Korea is a major economy and hosted the recent G-20 summit, the first in Asia. Economic growth in the country, as in much of Asia, is built on a tenuous foundation of peace. Unable to manage the situation, Seoul has reinvigorated its old alliance with the US.
Click here to find out more!Click here to find out more!
Ties with China are inevitably affected. Like most Asians, South Koreans look to the Chinese economy to drive growth. It is indeed one of the few countries in Asia to enjoy a trade surplus with China. There was earlier talk about a free trade agreement with China, either bilaterally or including Japan as a third partner. Such economic diplomacy now looks less likely.
China is the only country believed to be able to influence Pyongyang. But what Beijing has done since March is judged by many in South Korea as being less than helpful.
This highlights a second question about the rise of Asia: the role and attitude of China. There is no single Asia. Much depends - perhaps too much - on this giant that is changing as it rises.
Economically, China is the hub for the region's future growth. Inter-dependence in trade and investment between South Korea, Japan, Asean and even Taiwan - especially after their Chinese free trade agreement - is real and growing. The picture in South Asia too is similar, with China now India's number one trade partner.
Politically, however, Beijing has been much less attractive in 2010. The Korean issue comes on top of controversies with Asean members in the South China Sea, as well as the dispute with Japan over the Senkaku islands. These steps were surprising as China has for over a decade sought to befriend and charm Asean neighbours. The current leaders in Tokyo also want better ties with Beijing.
Visiting India in December, for the first time in five years, Chinese Premier Wen signed off on business deals worth US$16 billion. But the underlying competition between the two Asian giants continues to simmer. There is strategic competition over sea power as well as distant points in the Himalayas and political influence as India vies for a seat on the UN Security Council, where China is the only current Asian permanent representative.
That the Chinese leader went on to visit Pakistan also did not escape notice. Many in New Delhi believe Beijing continues to support their old rival in order to preoccupy India. Even in economic relations, trade tensions underscore the increase in flows, and India has slapped tariffs on a range of Chinese imports, including in the telecoms sector.
The nature of China and its diplomacy is being tested, and how Beijing has acted and will act in the coming months will be judged as showing its character as it grows. Some already ascribe ambition and arrogance to China while others will wait and see. Perceptions will shape how other Asians react. How the Chinese leadership approaches the US-China Summit to be held in January will be looked at carefully, not only by Americans but by other Asians.
It is to Asia's credit that through the financial crisis and 2010, the region has continued to rise. But challenges in 2011 may be even tougher, not only in economics but the underlying politics. Growth will be tested, but even fundamental peace and stability will come under stress. Compared to the developed world, Asia may be the only region expected to show strong growth, but that does not mean Asia is ready to be alone.
Simon Tay is chairman of the Singapore Institute of International Affairs and author of "Asia Alone: The Dangerous Post-Crisis Divide From America."
Source: http://news.asiaone.com
But it isn't nuclear warheads that have created the current turmoil. A torpedo sank the South Korean Navy vessel Cheonan in March, and on November 20 artillery shells pummelled South Korean military and civilian installations on the disputed island of Yeongpyeong. Standard weapons are more than enough to create a new sense of uncertainty. Nothing done since March has rebuilt stability.
Never mind that South Korea is a major economy and hosted the recent G-20 summit, the first in Asia. Economic growth in the country, as in much of Asia, is built on a tenuous foundation of peace. Unable to manage the situation, Seoul has reinvigorated its old alliance with the US.
Click here to find out more!Click here to find out more!
Ties with China are inevitably affected. Like most Asians, South Koreans look to the Chinese economy to drive growth. It is indeed one of the few countries in Asia to enjoy a trade surplus with China. There was earlier talk about a free trade agreement with China, either bilaterally or including Japan as a third partner. Such economic diplomacy now looks less likely.
China is the only country believed to be able to influence Pyongyang. But what Beijing has done since March is judged by many in South Korea as being less than helpful.
This highlights a second question about the rise of Asia: the role and attitude of China. There is no single Asia. Much depends - perhaps too much - on this giant that is changing as it rises.
Economically, China is the hub for the region's future growth. Inter-dependence in trade and investment between South Korea, Japan, Asean and even Taiwan - especially after their Chinese free trade agreement - is real and growing. The picture in South Asia too is similar, with China now India's number one trade partner.
Politically, however, Beijing has been much less attractive in 2010. The Korean issue comes on top of controversies with Asean members in the South China Sea, as well as the dispute with Japan over the Senkaku islands. These steps were surprising as China has for over a decade sought to befriend and charm Asean neighbours. The current leaders in Tokyo also want better ties with Beijing.
Visiting India in December, for the first time in five years, Chinese Premier Wen signed off on business deals worth US$16 billion. But the underlying competition between the two Asian giants continues to simmer. There is strategic competition over sea power as well as distant points in the Himalayas and political influence as India vies for a seat on the UN Security Council, where China is the only current Asian permanent representative.
That the Chinese leader went on to visit Pakistan also did not escape notice. Many in New Delhi believe Beijing continues to support their old rival in order to preoccupy India. Even in economic relations, trade tensions underscore the increase in flows, and India has slapped tariffs on a range of Chinese imports, including in the telecoms sector.
The nature of China and its diplomacy is being tested, and how Beijing has acted and will act in the coming months will be judged as showing its character as it grows. Some already ascribe ambition and arrogance to China while others will wait and see. Perceptions will shape how other Asians react. How the Chinese leadership approaches the US-China Summit to be held in January will be looked at carefully, not only by Americans but by other Asians.
It is to Asia's credit that through the financial crisis and 2010, the region has continued to rise. But challenges in 2011 may be even tougher, not only in economics but the underlying politics. Growth will be tested, but even fundamental peace and stability will come under stress. Compared to the developed world, Asia may be the only region expected to show strong growth, but that does not mean Asia is ready to be alone.
Simon Tay is chairman of the Singapore Institute of International Affairs and author of "Asia Alone: The Dangerous Post-Crisis Divide From America."
Source: http://news.asiaone.com
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