All posts for the month September, 2012

To Awaken Its Dormant Economy, Japan Must Confront An Age-Old Problem

Japan might be the third largest economy in the world, but the past 20 years have seen its GDP growth rate fall behind that of its economic rivals, the US and UK.

The outlook appears bleak. Recently, Japan halved its second-quarter growth estimate, raising fears of a recession. Morever, Japan’s exporters could face more pressure after the US Federal Reserve announced a third round of quantitative easing, which could drive down the US dollar against the yen.

Pressure to deal with the country’s darkening economic outlook has fallen to the Japanese government (whose deficit financing bill probably won’t make it through the opposition-ruled upper house).

Meanwhile, Japan’s central bank has vowed to maintain its monetary easing policy.

Ippei Fujiwara from the Australian National University examines the long-term economic health of the nation and suggests societal ageing and a lack of technological growth could be to blame for the country’s falling GDP growth rate.

 

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by byu2012 on September 29, 2012  •  Permalink
Posted in Asia, Asian conferences, Economics, Japan
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Posted by byu2012 on September 29, 2012

https://theasiancenturyreport.wordpress.com/2012/09/29/to-awaken-its-dormant-economy-japan-must-confront-an-age-old-problem/

Why China Won’t Use Its Financial Might to End Islands Row

Talk that China, the biggest holder of Japanese government bonds, may sell its Japanese debt to force Tokyo to cede ground in a heated islands dispute will remain just that, say analysts, with Beijing unlikely to pursue a course of action that could prove harmful to its own economy.

 

Jin Baisong, an official at the Chinese Academy of International Trade, a branch of the Chinese commerce ministry, caused a stir last week when he wrote in the China Daily, a Chinese Communist Party newspaper, that China should use its clout as a big holder of Japanese debt to impose sanctions and punish Japan.

China watchers say the comments reflect a perception within and perhaps outside China that Beijing can use its economic power to achieve its foreign policy aims. China is the world’s biggest holder of foreign currency reserves valued at more than $3 trillion, which it uses to invest in assets overseas such as U.S. Treasurys and Japanese bonds.

The view, however, is misguided, analysts say and the reality is this: China invests in foreign bonds because that is part of its economic policy. Holding foreign bonds allows Beijing to control its currency, and withdrawing money from Japan by selling Japanese debt would mean it has to look for another place to park its cash since bringing it home could spark an unwanted and sharp rise in the yuan.

 

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by byu2012 on September 29, 2012  •  Permalink
Posted in Asia, Asian conferences, China, Currency, Finance, Japan
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Posted by byu2012 on September 29, 2012

https://theasiancenturyreport.wordpress.com/2012/09/29/why-china-wont-use-its-financial-might-to-end-islands-row/

Indonesia’s Chairmanship of APEC Will Be Chance to Lead by Example

As Indonesia takes over the chairmanship of the Asia-Pacific Economic Cooperation forum from Russia next year, here is a chance for one of the region’s biggest developmental success stories to lead by example.

However, despite its achievements so far, Indonesia should improve its trade and investment environment before it can really chart the way for the 21-member grouping. Only then can it can make sure that the 2013 APEC Summit will be more than a photo op where leaders make sweeping declarations and empty promises.

APEC in the past has done well in formulating ambitious visions. The last time Indonesia was chair in 1994, APEC leaders set forth the so-called “Bogor Goals.” These stipulated that developed nations should achieve free and open investment by 2010, and developing nations by 2020. Eighteen years later, a lot of work has been done, but much more lies ahead. In fact, it would not be realistic at this point to expect the Bogor Goals to be achieved in just eight years’ time. Such goals should, instead, be seen as just one part of an overall vision that keeps driving us forward.

Indonesia’s ascension to the chairmanship comes midway between the 2010 assessment of the Bogor Goals and the next assessment in 2015. This gives Indonesia’s leaders the opportunity to help create a more far-reaching vision that goes beyond the Goals and which should focus on APEC’s long-term growth strategy.

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by byu2012 on September 29, 2012  •  Permalink
Posted in Asia, Asian conferences, Indonesia
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Posted by byu2012 on September 29, 2012

https://theasiancenturyreport.wordpress.com/2012/09/29/indonesias-chairmanship-of-apec-will-be-chance-to-lead-by-example/

No Major Impact on Japan’s Economy from Diaoyutais Row

Kenichi Ohmae

Taipei, Sept. 24 (CNA) The current tension between China and Japan over the disputed Diaoyutais Islands will have no major impact on Japan’s economy, a Japanese trend guru said Monday, days after Japan moved to nationalize the island group.

Kenichi Ohmae, who is visiting Taiwan, said Japan has made preparations for any impact on its economy that could arise from the tension with China, as rows regularly occur between the two sides.

For example, a clash between a Chinese fishing boat and Japanese patrol ships in waters near the Diaoyutais occurred in 2010, he said, adding that following that incident, China stopped its rare earth exports to Japan.

Because of these previous experiences, Japan is prepared for similar incidents to minimize the impact on its economy, he said. Both Japan and China should shelve their differences over the Diaoyutais to maintain peace between them, he added.

Tension over the Diaoyutais has escalated since Sept. 11, when Japan moved to nationalize the island group by buying three of its islets from a private owner, spurring anti-Japanese protests in many Chinese cities, as well as in Hong Kong and Taipei.

 

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by byu2012 on September 28, 2012  •  Permalink
Posted in Asia, China, Japan
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Posted by byu2012 on September 28, 2012

https://theasiancenturyreport.wordpress.com/2012/09/28/no-major-impact-on-japans-economy-from-diaoyutais-row/

Global Business Fears ‘Economic Dislocation’ if China-Japan Rift Deepens

Global business leaders are voicing increasing concern over heightened political tensions between China and Japan, sparked by a maritime dispute in the East China Sea. They fear an escalation may have a spill-over effect on their regional operations and damage trade ties between the world’s second and third-largest economies.

 

Company executives, diplomats and analysts told CNBC that supply chains across China and Japan and regional trade flows are at risk if the territorial dispute between the north Asian neighbors – believed to be the worst in decades – deepens.

“This could really be something that causes a huge economic dislocation,” Mike Splinter, chief executive officer at Applied Materials told CNBC. “If import barriers go up, it could affect our business.”

John Rice, president and CEO at GE Global Growth and Operations said he was worried about the potential “repercussions” to the flow of free trade that may arise because of escalating “geo-political” risk in the region. “That’s what we worry about…because we’re free traders to our core.” Rice said he was monitoring developments “very closely.”

While the precise scale of any disruption to manufacturing supply chains is hard to assess, many observers are starting to draw a parallel with the disruption in the wake of the 2011 Fukushima disaster in Japan.

 

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by byu2012 on September 28, 2012  •  Permalink
Posted in Asia, Asian conferences, Business, China, Japan, Trade
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Posted by byu2012 on September 28, 2012

https://theasiancenturyreport.wordpress.com/2012/09/28/global-business-fears-economic-dislocation-if-china-japan-rift-deepens/

Indonesia Remains Open to Foreign Investors

Indonesia’s policy stance will remain open to foreign investors despite there being some form of protectionist measures to safeguard certain domestic sectors and small businesses, says the Singapore-based Indonesian Investment Promotion Centre (IIPC).

“There is enough room and sectors for investors to participate in our vast economy,” IIPC head Muhamad Harri Santoso said during a breakout session themed Indonesia: Investment Outlook and Performance at the CIMB Asean SME Forum 2012.

According to Santoso, sectors such as food production, pharmaceutical and agricultural sub-segments such as livestock and fisheries may appeal to investors seeking business opportunities.

McKinsey & Co currently ranks Indonesia as the 16th largest economy in the world, offering up to US$500bil (RM1.53 trillion) worth of market opportunities for businesses in sectors ranging from consumer services, agriculture, fisheries, resources and education.

 

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by byu2012 on September 28, 2012  •  Permalink
Posted in Asia, Indonesia, Investment
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Posted by byu2012 on September 28, 2012

https://theasiancenturyreport.wordpress.com/2012/09/28/indonesia-remains-open-to-foreign-investors/

Asian Stocks Sink as Global Economy Fears Rise

Asian stocks sank Monday as investors’ growing concerns about the shaky global economy overpowered any remaining optimism over central bank stimulus efforts.

Crude oil tumbled while the dollar rose against the euro but fell against the Japanese yen.

Tokyo’s Nikkei 225 index dropped 0.7 percent to 9,043.52 and Seoul’s Kospi index shed 0.8 percent to 1.985.57. Hong Kong’s Hang Seng lost 0.5 percent to 20,636.25 and China’s benchmark Shanghai Composite Index retreated 0.9 percent to 2,008.21.

Sydney’s ASX S&P 200 fell 0.6 percent to 4,380.90. Benchmarks in Taiwan and Singapore also fell.

“Markets face a reality check going into this week,” strategists at Credit Agricole CIB wrote in a research note. They said that the “euphoria emanating” from recent moves by the Federal Reserve, European Central Bank and Bank of Japan to stimulate growth is “fading quickly.”

 

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by byu2012 on September 27, 2012  •  Permalink
Posted in Asia, Stock
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Posted by byu2012 on September 27, 2012

https://theasiancenturyreport.wordpress.com/2012/09/27/asian-stocks-sink-as-global-economy-fears-rise/

China’s Economy Could Lose Big-time If Japan Firms Suffer From Isles Row

China’s economy could take a severe beating if Japanese companies falter in the escalating standoff over sovereignty of the Senkaku Islands.

In a nutshell, China needs Japanese companies to keep unemployment in check and to promote development in rural areas, particularly as its economy is slowing.

On Sept. 18, thousands of Chinese employees of a Japanese-affiliated electronics manufacturer took part in anti-Japan demonstrations. No sooner had they returned to work than they started demanding a wage hike at two plants operated by the company.

Local government officials and police officers quickly stepped in. They told the Japanese employees to stay behind, citing the risk of confronting the Chinese workers directly, according to sources.

Government officials have since been involved in negotiations on a possible wage hike, the sources said.

Authorities were apparently determined to rein in any employee demands that could jeopardize the company’s ability to do business.

 

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by byu2012 on September 27, 2012  •  Permalink
Posted in Asia, Asian conferences, Business, China, Japan
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Posted by byu2012 on September 27, 2012

https://theasiancenturyreport.wordpress.com/2012/09/27/chinas-economy-could-lose-big-time-if-japan-firms-suffer-from-isles-row/

Asian Focus Is Vital for Economy’s Future, Says Carr

Bob Carr

The Foreign Minister, Bob Carr, has had to deliver a major speech on behalf of Julia Gillard in New York last night after the Prime Minister fell ill.

The speech was designed as a pitch to foreign investors to see the Australian economy as being about much more than just mining.

There were no immediate details on Ms Gillard’s condition.

Senator Carr described the prosperity generated from the mining boom as ‘‘low hanging fruit’’ as he warned today Australia must become Asia-literate and Asia-capable if it is to sustain the economy well into the future. 

In a speech in New York to the Asia Society and the Economic Club, Senator Carr also impressed upon investors that the economy today is less reliant on mining than generally thought. At the same time, he will stress the importance of ongoing Chinese demand for minerals and declare ‘‘Australia’s mining boom has long to run’’. But to prosper over the longer term, Senator Carr will say the nation needs to be able to think beyond the boom and cater to the rising Asian middle-classes. To do so, ‘‘we’ll need to know Asia’’. “We’ll need Asia literate policies and Asia-capable people,’’ he said.

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by byu2012 on September 27, 2012  •  Permalink
Posted in Asia, Asian conferences, Economics
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Posted by byu2012 on September 27, 2012

https://theasiancenturyreport.wordpress.com/2012/09/27/asian-focus-is-vital-for-economys-future-says-carr/

Workers Behind Asia’s Economic Miracle Head for Poor Old Age

Hundreds of millions of workers behind Asia’s economic miracle are heading into uncertain old age after governments failed to set aside enough funds for their pensions, said a book released Tuesday. 

“Without far-reaching reforms, the financial burdens of these (Asian pension) schemes on future workers may become politically unacceptable,” said the book, edited by Asian Development Bank principal economist Park Donghyun. 

The book, “Pension Systems in East and Southeast Asia: Promoting Fairness and Sustainability”, forecast current or looming problems both in rapidly greying East Asia as well as younger Southeast Asia. 

“Just as Asia’s economic landscape was transformed… due to exceptionally rapid growth, its demographic landscape is transforming due to a change in population age structure that is unprecedented both in its scale and speed,” it said. 

China will have 200 million people aged 60 or older by 2015, the year before its working-age population is forecast to begin to shrink, it said. 

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by byu2012 on September 26, 2012  •  Permalink
Posted in Asia, Asian conferences, Economics
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Posted by byu2012 on September 26, 2012

https://theasiancenturyreport.wordpress.com/2012/09/26/workers-behind-asias-economic-miracle-head-for-poor-old-age/

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