China's manufacturing sector has slowed further in June, according to HSBC's preliminary results from its monthly survey, released Thursday. The "flash" version of HSBC manufacturing Purchasing Managers' Index fell to a nine-month low of 48.3, down from May's final reading of 49.2.
Wednesday, 19 June 2013
Christine Lagarde Calls for Greater Regional Economic Cooperation in Asia
IMF visit to Malaysia November 2012
Christine Lagarde, Managing Director of the IMF, highlighted the increasing leadership role that Asia plays in the global economy.
During the dark days of the global financial crisis, it was Asia that kept the flame alive, accounting for about two-thirds of global growth, she said in a speech on “Asia and the Global Economy: the Promise of Integration” at the Global Public Lecture hosted by the Malaysia Economic Association. “Clearly, the momentum is here, the dynamism is here, and the future starts here.”
Ms. Lagarde also emphasized the virtues of economic cooperation, particularly trade and finance, within Asia. “There is no question about it: looking ahead, Asia can benefit from opening even more doors to trade.”
She noted that more than 90 percent of ASEAN cross-border portfolio investment flows are with advanced economies outside Asia. “Asia—with its current account surpluses—is simply not investing enough of its savings in itself,” she said.
Greater regional financial integration could open up a host of new benefits. Ms. Lagarde noted that it can boost domestic demand—partly by making it easier for small businesses in countries like Malaysia to gain access to credit. It can make economies safer, by allowing more insurance against volatility and adverse developments. And greater access to financial services by the poor can reduce inequality, she said.
“Here, Asia has a unique opportunity to get financial integration right—avoiding the missteps and excesses of the west,” Ms. Lagarde said.
Asia has a major and highly-respected voice in global economic governance, including through the G20 where it has six members. And Asia also plays an increasingly important role in the IMF.
In this regard, Ms. Lagarde noted that the membership came together to boost the IMF’s firepower by $461 billion—bringing the Fund’s total lending power to over $1 trillion. “I am very appreciative that Asia played such a leading role in building that financial firewall.” “It is a vote of confidence in the Fund,” she said. More than that, it is a vote of confidence in partnership, in solidarity, in the idea that by helping others, you are also helping yourself,” Ms. Lagarde concluded.
Christine Lagarde, Managing Director of the IMF, highlighted the increasing leadership role that Asia plays in the global economy.
During the dark days of the global financial crisis, it was Asia that kept the flame alive, accounting for about two-thirds of global growth, she said in a speech on “Asia and the Global Economy: the Promise of Integration” at the Global Public Lecture hosted by the Malaysia Economic Association. “Clearly, the momentum is here, the dynamism is here, and the future starts here.”
Ms. Lagarde also emphasized the virtues of economic cooperation, particularly trade and finance, within Asia. “There is no question about it: looking ahead, Asia can benefit from opening even more doors to trade.”
She noted that more than 90 percent of ASEAN cross-border portfolio investment flows are with advanced economies outside Asia. “Asia—with its current account surpluses—is simply not investing enough of its savings in itself,” she said.
Greater regional financial integration could open up a host of new benefits. Ms. Lagarde noted that it can boost domestic demand—partly by making it easier for small businesses in countries like Malaysia to gain access to credit. It can make economies safer, by allowing more insurance against volatility and adverse developments. And greater access to financial services by the poor can reduce inequality, she said.
“Here, Asia has a unique opportunity to get financial integration right—avoiding the missteps and excesses of the west,” Ms. Lagarde said.
Asia has a major and highly-respected voice in global economic governance, including through the G20 where it has six members. And Asia also plays an increasingly important role in the IMF.
In this regard, Ms. Lagarde noted that the membership came together to boost the IMF’s firepower by $461 billion—bringing the Fund’s total lending power to over $1 trillion. “I am very appreciative that Asia played such a leading role in building that financial firewall.” “It is a vote of confidence in the Fund,” she said. More than that, it is a vote of confidence in partnership, in solidarity, in the idea that by helping others, you are also helping yourself,” Ms. Lagarde concluded.
Russia hints nuclear arms cuts will not come easy
From Reuters
Russia voiced concern on Wednesday about U.S. missile defenses and high-precision conventional weapons, signaling that nuclear arms cuts proposed by President Barack Obama are likely to face formidable obstacles.
In a speech in Berlin, Obama said he wanted to reduce the strategic nuclear weapons the United States deploys by a third and would seek to negotiate cuts with Russia. The former Cold War foes possess the vast majority of the world's nuclear weapons.
But Russian President Vladimir Putin reiterated Moscow's concerns about the anti-missile shields the United States and NATO are deploying, and said the development of high-precision non-nuclear weapons could upset the strategic balance.
"These weapons are approaching the level of strategic nuclear arms in terms of their strike capability. States possessing such weapons strongly increase their offensive potential," Putin said at a meeting on defense issues in the Russian city of St Petersburg.
"How can we take the idea of strategic nuclear weapons reductions seriously when the United States is building up its ability to intercept these strategic nuclear weapons?" he said.
"These things clearly do not go together. It's obvious that Russia's highest political leadership cannot take such proposals seriously," Rogozin told reporters.
Federal Reserve upgraded their view on economic recovery in the US economy,but kept their bond buying program unchanged
From the WSJ
''Federal Reserve officials on Wednesday upgraded their assessment of the economic recovery and Chairman Ben Bernanke said the central bank could begin pulling back its $85 billion-per-month bond-buying program later this year.
"Labor market conditions have shown further improvement in recent months," the Fed said in its formal policy statement, though it noted that unemployment remains "elevated." Fed officials also noted that they see "the downside risks to the oulook for the economy and the labor market as having diminished since the fall."
But Mr. Bernanke made clear at the outset of his press conference that he and other officials believe the economy is on a better path. He said the program of bond buying could be completed by the middle of next year as the jobless rate reaches a projected 7%.
Despite its upbeat view of the economy, the Fed gave a slight nod to recent soft inflation readings, saying that "inflation has been running below" the central bank's 2% target, although it added that "[l]onger-term inflation expectations have remained stable."
However, he said a wind-down would be contingent on the steady growth the Fed has been seeing and said there is no trigger for a reduction in purchases. He also said the Fed could ramp up its buying, even after cutting, if conditions warrant. "Our policy is in no way predetermined," he said, noting that the Fed might decide to shift from this plan if the economy doesn't measure up to the Fed's expectations.
The Fed's more optimistic view of the economy was also reflected in its revised economic projections, which were also released Wednesday. Fed officials saw unemployment falling slightly faster and hitting lower than they did in their previous forecasts, from March. For instance, by the end of 2014, they see the jobless rate hitting between 6.5% and 6.8%, an improvement from March when they saw it hitting between 6.7% and 7% by then. At the end of last year, the forecast was 6.8% to 7.3%.
Despite the lower expected unemployment rate, Fed officials still expect to keep short-term interest rates low until 2015, their projections showed. Fourteen Fed officials said they didn't expect to start raising rates until 2015, compared to 13 who said so in March''.
Honeywell shifting from supporting China Airlines,to domestic production and engineering development.
''Honeywell Aerospace, the United States-based aviation parts maker and a major supplier to China's domestic commercial aircraft, the C919, is upbeat about the much-anticipated jet's maiden flight in 2015, a senior executive of the company said.
"We are on schedule" with the Commercial Aircraft Corp of China's plan for the first flight, John Bolton, president of the air transport and regional strategic business division at Honeywell Aerospace, told China Daily during the Paris Air Show, which opened on Monday.
"We are on schedule" with the Commercial Aircraft Corp of China's plan for the first flight, John Bolton, president of the air transport and regional strategic business division at Honeywell Aerospace, told China Daily during the Paris Air Show, which opened on Monday.
The US-based company has also been vying to supply its electric taxiing system, jointly developed with French aircraft and rocket engine producer Safran SA.
The product, which is being demonstrated at the Paris Air Show, will enable aircraft to taxi under electrical power while the main engines remain off. The product is aimed at improving airline operating efficiency and cutting fuel consumption.
Apart from its partnership with COMAC, Honeywell has been seeking greater collaboration with other Chinese airplane manufacturers to capitalize on burgeoning demand in the Chinese aviation industry.
Honeywell has shifted its business focus in China from supporting Chinese airlines to domestic production and engineering development, as China is expected to join the US and Europe as the third pillar of the global aviation industry'.
World Bank: Global Warming may cause severe problems in India,Sub-Saharan Africa and South Asia
''WASHINGTON: Global warming could lead to more extreme droughts in large parts of India, resulting in widespread food shortages and hardship in the country, in the next few decades, a new World Bank report warned today.
The impact of a possible global temperature rise of 2 degrees Celsius in the next few decades threatens to trap millions of people in poverty, according to the report.
The soaring temperatures will also drive regular food shortages in Sub-Saharan Africa.
Shifting rain patterns in South Asia due to warming could leave some parts under water and others without enough water for power generation, irrigation, or drinking, the report said.
More extreme droughts in large parts of India could lead to widespread food shortages and hardship," the report said.
Another impact of climate change could be degradation and loss of reefs in South East Asia possibly resulting in reduced fish stocks and coastal communities, while cities could be more vulnerable to increasingly violent storms, it said''.
The impact of a possible global temperature rise of 2 degrees Celsius in the next few decades threatens to trap millions of people in poverty, according to the report.
The soaring temperatures will also drive regular food shortages in Sub-Saharan Africa.
Shifting rain patterns in South Asia due to warming could leave some parts under water and others without enough water for power generation, irrigation, or drinking, the report said.
More extreme droughts in large parts of India could lead to widespread food shortages and hardship," the report said.
Another impact of climate change could be degradation and loss of reefs in South East Asia possibly resulting in reduced fish stocks and coastal communities, while cities could be more vulnerable to increasingly violent storms, it said''.
Slowing growth on FDI in China?
''Growth of China's foreign direct investment in May dropped to just under 0.3 percent, an indicator that global companies remain hesitant to expand in China amid its economic slowdown.
According to the Ministry of Commerce, FDI was up just 0.29 percent from a year earlier to $9.26 billion, compared with a 0.4 percent increase in April and the slowest growth since February.
But Shen Danyang, spokesman for the ministry, rebutted the notion that the nation is losing its appeal to multinationals as an FDI destination.
He said that "from a global perspective, China's FDI trend remains comparatively stable and good ... and positive growth (in FDI) for four consecutive months, to a large extent, shows the recognition of global investors on the competitiveness of the Chinese economy and the nation's investment environment".
FDI in 2012 hit a record high of $111.7 billion. The nation has remained the most attractive FDI destination among developing countries for more than a decade.
But 2012 was the first year that the nation saw a drop in its annual FDI since 2009.
According to the ministry, during the first five months of 2013, FDI was up just slightly more than 1 percent from a year earlier to $47.6 billion, mainly led by developed nations and regions.
Investment from the United States was up by 22.6 percent, and that from the European Union increased 24.1 percent from January to May.
During a meeting with executives from more than 10 multinational companies that were to attend the Fortune Global Forum 2013 in Chengdu earlier this month, Premier Li Keqiang tried to clear up the foreign businesses' doubts by saying that "China has the ability and conditions" to sustain economic growth and "China will be committed to deepening the reform and opening-up policy".
Li encouraged the foreign companies to "cash in on the huge opportunities resulting from the nation's economic development and efforts toward industrialization and urbanization".
Abenomics positive short term results.
TOKYO (AP) -- Japan's trade deficit rose nearly 10 percent in May to 993.9 billion yen (nearly $10.5 billion), highlighting the challenge Prime Minister Shinzo Abe faces in revitalizing manufacturing as industries increasingly shift production offshore.
Rising costs for imports due to the cheaper yen matched a 10 percent rebound in exports from a year earlier, , the Finance Ministry reported Wednesday.
A weakening in the yen's value has pushed up costs for imports of crude oil, natural gas and other commodities for this resource-scarce nation, but the deficit in May was bigger than most economists' estimates.
The May data(also) show Japan's efforts to boost trade with the rest of Asia are yielding results, with exports rising 11 percent to 3.2 trillion yen ($33.7 billion), as imports climbed nearly 10 percent to 2.98 trillion yen ($31.4 billion).
Exports to China rose 8.3 percent in May from a year earlier to 1.05 trillion yen ($11 billion) while imports jumped 15 percent to 1.46 trillion yen ($15.4 billion), leaving a deficit of 410 billion yen ($4.3 billion).
Increasingly, Japanese companies are expanding their manufacturing in Southeast and South Asia, partly to tap new, faster growing markets and partly to hedge risks from their already huge commitments in China, given the threat of anti-Japanese moves due to a festering territorial dispute with Beijing.
Economists say Abe must move ahead with promised tax cuts and deregulation to spur investment and hiring by corporations that complain inflexible labor laws and high taxes and wages are hurting their competitiveness.
Japan's economy grew at a 4.1 percent annual rate in the first quarter of the year and is forecast to continue its recovery this year, boosted by government stimulus spending and aggressive monetary easing aimed at ending two decades of stagnation.
Japan's economy grew at a 4.1 percent annual rate in the first quarter of the year and is forecast to continue its recovery this year, boosted by government stimulus spending and aggressive monetary easing aimed at ending two decades of stagnation.
G8 urges Japan to fix budget
''Japan was urged to follow up on massive central bank stimulus with structural reforms and measures to tackle its budget deficit.
The G8 also said Japan needed to address the challenge of defining a credible medium-term fiscal plan.
"Japan's growth will be supported by its near-term fiscal stimulus, bold monetary policy and recently announced strategy for promoting private investment," it said. "However it will need to address the challenge of defining a credible medium-term fiscal plan."
Subscribe to:
Posts (Atom)