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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.

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 »

China’s property market – seen by some as the biggest risk facing the global economy – appears to be weakening across the board as construction activity cools, land sales slow, apartment sales slide, unsold inventory rises, financing grows tighter and the sentiment of developers slumps markedly, according to a quarterly survey conducted by Standard Chartered Bank.

“Our Developers Sentiment Index suggests that the worst times are still ahead for many developers,” concluded the Standard Chartered report authored by Lan Shen and Stephen Green. The survey polled 30 senior managers at real estate developers in June-July in six cities – Hangzhou, Foshan, Huangshi, Baoding, Lanzhou and Nanchong – on current market conditions and expectations.

The results were almost uniformly gloomy Continue reading »

Now that the football is finished, there is time to ponder the cultural legacy of the World Cup. For Chinese, some of it may be written in characters.

The Chinese characters inked as tattoos onto footballers’ bodies – no matter how bizarre or bewildering their message – are being seen in some quarters as indicative of a great power’s cultural projection.

“Cultural differences lead to funny misunderstandings, but they still help spread the culture,” Wang Qingyuan, head of the China Association of Tattoo Artists was quoted by the state-run China Daily European Weekly as saying. Continue reading »

Banks intensified their squeeze on mortgage borrowers in China in June, contributing to another sharp decline in real estate sales for the month and ratcheting up the pressure on several city government finances.

Data collected by China Confidential, a research service on China at the Financial Times, showed that only 5 per cent of first time buyers were able to secure a mortgage below the benchmark interest rate. This compared with 8 per cent in May and 39 per cent in June 2013, according to China Confidential’s monthly survey of 300 real estate developer sales offices in 40 cities across the country. Continue reading »

China said on Tuesday it will tighten curbs on journalists to prevent the disclosure of state secrets, commercial secrets and “unpublicised information” as the administration of Xi Jinping reinforced controls over information amid outpourings of anti-Beijing sentiment in Hong Kong.

Xinhua, the Chinese official news agency, said that rules published by the State Administration of Press, Publication, Radio, Film and Television prohibit disclosure of “various information, materials and news products that journalists may deal with during their work, including state secrets, commercial secrets and unpublicised information.”

None of the key terms used – including state secrets, commercial secrets and unpublicised information – were defined, leaving them open to interpretation by China’s army of censors both within media organisations and in several state bodies charged with regulating information industries. Continue reading »

How do you bank the “unbankable”? The question could hardly be of more importance to small businesses in emerging markets, an estimated 200m of which are starved of the finance they need to grow.

One somewhat unlikely – but increasingly popular – answer is through psychometric tests. By yielding profiles of loan applicants’ honesty, intelligence, aptitude and beliefs, the tests facilitate lending to otherwise “unbankable” borrowers who do not possess a credit history, collateral or accounts.

Artful questions are key to the tests’ efficacy, say finance executives and industry experts. For example, if you want to assess a prospective borrowers’ honesty, it would be naïve to simply ask if they are honest, or if they prize integrity. Continue reading »

Geopolitical risks rank as the top worry among global investors, eclipsing economic concerns such as a weakening Chinese economy and slowing emerging market (EM) growth, according to a survey of 941 investors announced by Barclays on Tuesday.

The survey, conducted in the second quarter of this year, contrasted with surveys in the first quarter of this year and fourth quarter of 2013, which showed China/EM growth and the tapering of monetary stimulus by the US Fed as top worries for the following 12 months (see chart).

The survey also found that EM investors favoured equities, local currency debt and high yielding benchmark bonds as investment choices. Continue reading »

More bad news for China’s property market. Not only is the People’s Daily quashing hopes for a real estate stimulus, but data from 42 of the country’s most significant cities is showing a declining trend for property sales in the first half of June.

Home sales from the 42 cities, monitored by China Confidential, fell 16 per cent in the first 15 days of the month from the same period in May. This followed some signs of recovery in May, when transactions rose 4 per cent month on month.

On a year on year basis, property unit sales fell 29 per cent, representing a deepening of the declining trend seen in May – when sales were down 14 per cent year on year – and in April, when sales were down 23 per cent. Continue reading »

Accelerating urbanisation – especially in India and China – is set to boost emerging Asia’s share of global spending on infrastructure and capital projects over the next decade, slashing the developed world’s market share by 2025, according to a PwC report released on Monday.

The report, for which Oxford Economics researched trends in 49 countries on six continents, estimates that the world’s urban population is currently swelling by around 1.5m people a week, mostly because of rural-urban migration in the emerging world. In India, for example, the urban population is likely to rise by some 500m over the next four decades. The Pakistan city of Karachi grew by 80 per cent to 13m in the decade to 2010. Continue reading »

Several big risks – including China’s cooling property market, instability in Ukraine and the prospect of tighter global financial conditions over time – still stalk emerging markets (EM) in spite of a reduction in overall risk levels compared to last year, the World Bank said in a report on Tuesday.

In the 154-page report, Global Economic Prospects, the World Bank trims its global GDP forecast for this year to 2.8 per cent year-on-year, down from 3.2 per cent previously. But, it adds; “Despite the early weakness, growth is expected to pick up speed as the year progresses and world GDP is projected to expand by 3.4 per cent in 2015 and 3.5 percent in 2016.” Continue reading »

The ingenuity of Chinese netizens seeking to commemorate the 1989 Tiananmen massacre in defiance of the country’s “Great Firewall” of censorship is reaching new heights.

Armed with little but the remarkable flexibility of Chinese characters, the more daring among 618m internet users are finding an endless string of linguistic ruses to outfox – at least temporarily – the world’s most formidable forces of online control to get their messages out. Continue reading »