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James Kynge

James Kynge is the FT's Emerging Markets Editor and an Associate Editor. Until the end of 2013, he was Principal of FT Confidential, the Financial Times' premium research service on China, South East Asia and Latin America. He has been based as a journalist in Japan, China, Taiwan, Malaysia, Singapore, Russia and former Soviet Central Asia over the last 27 years. His book, China Shakes the World, was an international bestseller, translated into 19 languages.

Unhealthy lifestyles are spreading through emerging market (EM) economies as people adopt fast-food diets, work in stressful and sedentary jobs and contend with worsening pollution. These are unwelcome trends unless, perhaps, you happen to be an investor in EM healthcare stocks.

A proliferation in ailments, rising incomes and growing government support for healthcare in EM countries are bolstering the portfolios of Sectoral Asset Management, a fund company with about $3.5bn under management. In March this year, it publicly launched a fund invested solely in EM healthcare companies. Continue reading »

There is more gloomy news for the world’s second largest economy. A comprehensive official survey of Chinese households, businesses and banks finds demand for loans slackening further in the third quarter, suggesting scant prospects of a reprieve from the credit slump seen in August and July.

Some 3,100 banks interviewed by the People’s Bank of China (PBoC), the central bank, reported a significant easing in loan demand among all three categories of firms – small, medium and large – for the third quarter, which ends at the end of September.

The loan demand index fell to 66.6 per cent, down from 71.5 per cent (see chart). The muted demand for loans is set to create headwinds for the PBoC’s initiative this week to boost economic growth by injecting Rmb500bn ($81bn) into the five largest state-owned banks, economists said. Continue reading »

Headline statistics on the Chinese property market continue to relay a picture of virtually unrelieved gloom. However, in one small but important area, market pressures appear to be easing.

All year long Chinese banks have tightened up on mortgage lending to both first time buyers and purchasers of second homes, withdrawing discounts on mortgage loans and restricting loan growth – and thereby depressing buying activity.

However, this changed in August, with banks switching course to offer softer terms on mortgage loans, research companies said. Continue reading »

A huge bonfire of the brands awaits auto manufacturers in China as some 90m car owners prepare to disregard loyalty when they chose their next model.

A survey of some 2,400 car owners conducted by the Boston Consulting Group (BCG) found an itch to switch brands among 83 per cent of respondents who drove domestic Chinese brand cars. Of these, only 30 per cent said they would drive another domestic brand as their next car, while a full 40 per cent said they planned to plump for a Volkswagen.

The findings suggest that the next big trend for auto manufacturers in the Chinese market – which has expanded tenfold since 2000 to register annual sales of around 20m units – may not be so much concerned with chasing growth as with inculcating brand loyalty. Continue reading »

Wealth is not necessarily translating into health for China’s growing cohort of millionaires, many of whom complain of eating disorders, too much alcohol and an average of just 6.2 hours of sleep a night (see chart).

Fast living is blamed for a variety of ailments, with around a third of millionaires (those with a personal wealth of Rmb10m or US$1.6m, £1m) suffering from insomnia, headaches, fatigue and memory loss while smaller proportions endure hair loss, immune problems, numb limbs and smokers’ coughs, according to a survey by Hurun Research Institute released on Friday.

Such conditions underpin a burgeoning demand among wealthy Chinese for products, treatments and lifestyle choices that are thought to confer health. “There is a clear trend among the Chinese millionaire class towards exercise, eating more carefully and generally taking better care of their bodies,” said Rupert Hoogewerf, chairman of the Hurun Report. Continue reading »

Emerging market (EM) multinationals have exhausted a phase of “easy growth” and now face a tougher task battling against increasingly savvy developed market (DM) competitors and resurgent domestic rivals, a study released on Thursday finds.

The main problem experienced by a selection of 100 rapidly globalising EM companies is already familiar to DM multinationals: the costs of running a cross-border network and attracting top talent are shaving margins and racking up debts, according to the study by the Boston Consulting Group (BCG). Continue reading »

Mongolia is determined to reduce default risks on its international debt by resuming a long-stalled $4.2bn copper mine project by the end of this year, bringing government debt levels to within legal limits and cutting back on welfare payments, a senior government official said.

Risks associated with the north Asian country surged in July after Moody’s, the credit rating agency, downgraded its bonds by one rung to B2, a rating that signifies “high credit risk”. The reasons for the downgrade included plunging foreign exchange reserves, expansionary monetary and fiscal policies and an unpredictable environment for foreign direct investment (FDI). Continue reading »

Chopsticks are the ultimate mature technology, unimproved for thousands of years. But now a Chinese internet company has upgraded them to tackle a very modern challenge.

Baidu, the search engine, unveiled yesterday a prototype pair of “smart” chopsticks to form the last line of defence in Chinese diners’ battle against “gutter oil” and other food scares. Continue reading »

Critics who slam Malaysia for spending beyond its means in racking up a level of household indebtedness that surpasses the US are misjudging the country’s economic resilience, a senior official said.

Abdul Wahid Omar, a minister in the prime minister’s department, told the Financial Times that Malaysia “deserves better” than the negative outlook on its sovereign debt rating that was reaffirmed last month by Fitch, the rating agency.

“We believe we deserve better,” said Wahid Omar, who heads the country’s Economic Planning Unit. “We have demonstrated our ability to manage government finances better (and) we are taking measures to reduce subsidies and introduce the GST (Goods and Services Tax).” Continue reading »

China’s property slump – which in July was characterised by widespread declines in city real estate prices coupled with falling sales volumes – appears to have carried over into August, data for the first half of the month shows.

Data from 42 large cities monitored by China Confidential, a research service at the Financial Times, shows a 20 per cent year on year decrease in home sales in the first 17 days of August. Unsold inventory in 14 large cities jumped by 48 per cent year on year in the same period, the data shows (see chart). Continue reading »

Global institutional investors regard emerging market (EM) equities as the most attractive of all major asset classes, a new survey of 111 institutional investors conducted by ING Investment Management shows.

A year to the month after Morgan Stanley coined the term “fragile five” to denote five large EM economies – Brazil, South Africa, India, Indonesia and Turkey – that were considered vulnerable to financial market turmoil, investors have become seduced by the risk/reward relationship in much of the EM universe. Continue reading »

The number of middle class households in 11 key sub-Saharan African countries – excluding South Africa – are set to triple to 22m by 2030, creating a burgeoning consumer market for items such as vehicles, insurance policies, property and health products, according to a Standard Bank research report.

Simon Freemantle, senior political economist at Standard Bank and author of the report, said the prospective boom in middle class households – those earning between US$8,500 and US$42,000 a year – is also likely to be complemented by a swelling in the number of lower middle class households that earn between US$5,500 and US$8,500 annually. Continue reading »

It may never rival porcelain or Peking duck in popularity beyond China’s shores, but the “facekini” is being hailed by domestic newspapers as the country’s latest cultural gift to the world.

The recent publication by a New York-based style magazine, CR Fashion Book, of a photo shoot showing models wearing “pool masks” has prompted the Qingdao Evening News to claim the look as a foreign variation on a familiar theme in the north eastern seaside city.

“As soon as this photo shoot was published, the sharp-eyed among our netizens immediately recognised that this was none other than a ‘knock off’ of our Qingdao old woman’s ‘facekini’,” the newspaper saidContinue reading »

Remittances sent home by Bangladeshi workers overseas rose 19.7 per cent to a record monthly high of $1.4bn in July, boosting the country’s GDP outlook, bolstering the current account surplus and helping to offset an over-reliance on garment exports, analysts said.

“The improvement is credit positive for Bangladesh (Ba3 stable) because it suggests a bolstering of the sovereign’s external payments position,” said Moody’s, the credit rating agency, in an August 11 report (see chart below).

Bangladesh, the eighth biggest remittance recipient country in the world, relies on such inflows to drive consumer spending, which accounts for nearly 80 per cent of domestic GDP. Moody’s projected the remittance inflows will push GDP growth above 6 per cent this fiscal year, up from 5.8 per cent last fiscal year. Continue reading »