In spite of Mikhail Gorbachev’s warning this month that the world is on the brink of a new Cold War, it is Asia that we should be worrying about, says former Australian Prime Minister Kevin Rudd. The region is home to seven flashpoints which, if they erupt, could end the greatest economic growth story of the 21st century.
“We face this remarkable set of circumstances where global growth will be driven from Asia,” Rudd told beyondbrics in a recent interview in Dubai.“But Asia from a political perspective is a potentially unstable region. So the world [should have] a deep interest in not just the future growth trajectory, but also the political and security circumstances which underpin that equation.” Read more
Asian companies are the hardest hit by fines for breaking antitrust law in the US, a new Korean report has found.
Fines imposed on Asian companies by the US increased from $428m between 1995 and 2004 to $5.1bn between 2005 and September of 2014 – or 77 per cent of all fines for such offences – according to a report published on Monday by the Korea Chamber of Commerce & Industry.
One of the report’s authors says Asian companies are falling foul of “cultural” differences with the US, where what they regard as cooperation is often seen as collusion. Read more
As rumours swirl about the design of Apple’s iPhone 6 ahead of its hotly anticipated debut next week, economists have made some more hard-headed – but no less remarkable – predictions about its impact.
Bank of America Merrill Lynch Global Research has estimated that the “expected large scale” of sales of the iPhone 6 will push up GDP in Taiwan by 40 basis points this year, add 1 percentage point a month to China’s export growth for the rest of 2014 and boost Taiwan’s export growth by around 2 percentage points a month between August and October and then 1 percentage point a month until January 2015. Read more
As the global automotive industry continues its recovery there is particularly bright news for investors in OEMs (original-equipment manufacturers – otherwise known as automakers) that are focused on emerging markets.
The global automotive industry has been more successful than most at producing investor value, says the Boston Consulting Group in a recent report, A Comeback in the Making. Component manufacturers posted a median annual total shareholder return (TSR) – a measure of the value a company creates for its shareholders – of 33 per cent between 2009 and 2013, while OEMs produced a TSR of 29 per cent in the same period. Compare this to a 21 per cent TSR for the 26 global industries tracked by BCG.
But it was carmakers focused on emerging markets that were especially successful at pushing up value for shareholders. Read more
“When eating an elephant, take one bite at a time”, US Army officer and Vietnam veteran Creighton Abrams once said.
In his new book, The Rise of the New East, Ben Simpfendorfer does just that. His elephant is “The East”, the group of almost 50 emerging markets ranging from Turkey to China that is home to well over half of the world population.
Simpfendorfer gives his topic a thorough treatment. While his insights seem logical and intuitive, taken together they give an impressive oversight of into key trends shaping the region. beyondbrics noted five insights that particularly stood out. Read more
The years of periodic “will-they-won’t-they” chatter about South Korea’s potential upgrade to developed market status are over, at least for now. Index compiler MSCI has finally thrown in the towel.
But rather than bump up Korea (and Taiwan), it has instead decided to boot them off its upgrade watch list. Regardless of your view on the underlying debate, the clarity such a move offers should be welcomed. Read more
PMI scores | Source: HSBC / Markit
Asian manufacturers are more positive than any point since April, according to the latest Markit / HSBC PMI surveys.
The purchasing managers index for October for six Asian economies (China, India, Indonesia, South Korea, Taiwan and Vietnam) showed that five scored over the 50 mark that separates expansion from contraction, and with none showing a decline in sentiment. It’s a big improvement on just two months ago when only China was showing any postive signs. Read more
Taiwan’s growth for Q3 came in lower than expected: it was 1.58 per cent year on year, against a government forecast of 2.47 per cent.
But there are reasons to be cheerful. Read more
My bubble's bigger than your bubble
Rising house prices and property bubbles are something of a UK obsession. But for all the help to buy worries, house prices rose by just 1.4 per cent year-on-year in the second quarter, according to estate agents Knight Frank.
The figure for London is much higher, of course. But for a housing boom of far greater magnitude, just take a look at Asia. Read more
Taiwan’s exports slumped 7 per cent in September year-on-year, far worse than analysts had predicted. That’s the bad news.
The good news – and it’s a crumb of comfort – is that the electronic parts industry managed to squeeze into positive territory, with a smidgen of growth. Plus European demand is holding up. Those are the few positives. Read more
There has been a bit of a turnaround in sentiment in Asian manufacturing from August to September. The purchasing managers index (PMI) readings for six major Asian economies paint a more optimistic picture – just.
The Asia PMI scorecard shows that August’s red is turning blue – with three indices moving above the 50-mark that separates expansion from contraction.
Source: HSBC, Markit
While attention has been focused on the
demise of new chapter for Nokia as part of Microsoft, another phonemaker is in deep trouble.
Unlike Nokia, Taiwan’s HTC actually makes very good smartphones, and sold a lot of them a few years back. But sales have been dropping steadily since the 2011 heyday, and two bits of news have made the outlook for investors even grimmer. Read more
After the recent emerging markets rout, any good news, however slight, is welcome. A quick look at the Asia PMI scorecard shows just one bright spot among several less encouraging numbers, but it’s the one that counts: China.
Source: HSBC / Markit
A quick look at manufacturing purchasing managers’ indices for Asia this year shows a worrying trend. From a positive start to 2013, the numbers for the six countries tracked by Markit Economics/HSBC are gradually slipping down to the 50 mark separating expansion from contraction, and below.
Source: HSBC, Markit
Tiawanese yacht makers like Horizon and Bluewater have helped push the country up the ranking of leading boat makers. The problem is that the whole industry has shrunk as a result of the global financial crisis. The FT’s Sarah Mishkin reports from Kaohsiung in southern Taiwan.