Chinese real estate industry is marching into the overseas market.

While the Chinese real estate industry is marching into the overseas market, its first choice is usually countries where there are many Chinese people, such as the US, Canada, Australia, New Zealand, Malaysia and Singapore, International Finance News reported.

Chinese real estate enterprises investing in the overseas property market can date back to the year 2006, when Shanghai Industrial Group, joined by Ningbo United Group, Jinjiang International Group and Greenland Group, made a $1.346 billion investment of the "Baltic Pearl" project at Finland Bay in St. Petersburg, Russia.

The most recent investment was made on October 2012. Greenland Group and US Forest City Group started a joint venture and made an acquisition of the Brooklyn Atlantic Square real estate project. The total investment exceeded $5 billion and is the largest single real estate project in the last 20 years in New York. Greenland Group has successfully entered six countries including the US, South Korea and Australia.

Actually, top Chinese real estate enterprises have never missed any parties that explore the overseas market.

Since 2012, large real estate companies including Vantone Real Estate, Capital Group, China Railway Construction Corporation and SOHO have all had real estate projects or made investment plans in the overseas market.

"They would be ashamed to claim themselves as ‘first-tier companies' if they do not explore the overseas market," a real estate commentator joked.

In 2012, Dalian Wanda, China Oceanwide Holdings and Russian North Caucasus Resorts company signed an intent agreement with a total investment of $2.5-3 billion, planning to build large cultural, tourism and commercial facilities in Moscow, St. Petersburg and North Caucasus.

Earlier this year, China's biggest real estate company, Vanke, entered the US by buying a 70 percent stake of Block 201 in Folsom Street, San Francisco from its real estate veteran developer, Tishman Speyer.

Another Chinese real estate giant, Country Garden, has invested five real estate projects in Johor Bahru in south Malaysia last year and now these projects are for sale. The thousands of houses built have been proved to be very popular and over 10 million yuan worth of houses have been sold. What is worth noticing is that 60 percent of the buyers are Chinese.

It is easier for those Chinese who want to make a property investment in a foreign country to choose large domestic enterprises. They are more familiar to the Chinese people and can be quickly identified with, Country Garden explained.

In fact, the first choice for most Chinese real estate enterprises who have marched into the overseas market is those countries where there are many Chinese residents, such as the US, Canada, Australia, Malaysia, Singapore and Japan.

In recent years, the number of buyers from the Chinese mainland has been soaring, leading to the heating-up of the overseas property market. In Europe and the US, many natives have complained that the influx of Chinese investors has driven up house prices.

Global real estate service provider Savills' data show that buyers from the Chinese mainland have become the largest buying group of private residences in Singapore since 2010, beating the Malaysians and Indonesians.

"We go where Chinese people go," Vanke President Yu Liang said straightforwardly.

Although some countries have rules that state a certain proportion of the houses must be sold to the natives, the large number of Chinese buyers has given Chinese real estate developers enough confidence for their overseas gold rush.

Source: ChinaDaily

Location, location … Chinese investors learn

As all successful developers know, only a prized and special location can breathe life and meaningful value into the structures that arise on it. Now, more Chinese developers are showing a strong will to stick to this idea with diversified buyers in the US.

In the latest case, Beijing-based Oceanwide Real Estate Group sees California as its ideal destination to expand overseas business as a new year is around the corner.

With a media avalanche, its Tohigh Construction unit recently signed an agreement to acquire Fig Central in Los Angeles for up to $200 million.

"Chinese and other Asian developers or investors are only looking for the best development sites in the downtown, with entitlements in-place, for the development of luxury condominiums, and to a lesser extent, hotel and retail," John Eichler, executive director of Cushman & Wakefield told China Daily on Monday.

He is one of two brokers on the deal. The seller is Moinian Group — one of the most active and prestigious high-rise developers in New York City.

Fig Central is a 4.6-acre plot within the downtown Los Angeles Sports and Entertainment District, a high-end, mixed-use complex, he said.

"At this time, Chinese developers or investors are not considering Grade B development sites in the downtown or other communities in Los Angeles," Eichler said.

Its development potential is the entitlements to build about 1.5 million square feet of high-rise mixed-use structures, including condominiums, hotels and retail space, he added.

The Chinese company said the project is a very important step for them to go abroad and push forward the internationalization of the company.

Experts said the purchase reflects a growing interest by Chinese investors in US real estate, particularly on the West Coast and in New York City.

"I know a lot of similar cases are undergoing it on the West Coast, and California has been the most popular destination for Chinese real estate developers and investors," said Skip Whitney, executive vice-president of Kidder Mathews, a San Francisco-based commercial real estate firm.

During the first ten months of this year, investment in the US property market from China touched a ceiling of $ 5.89 billion, six times of the combined value of their investment in 2011 and 2012, according to the latest data available from research institute Rhodium Group.

Whitney noted San Francisco and Los Angeles are the top destinations in California for Chinese developers, as they prefer to do business in a more familiar culture and there are more Chinese-heritage communities and immigrants in the two cities.

"I think Oceanwide has done its homework for its investment, just like Vanke's overseas move to San Francisco earlier this year," he said.

China Vanke, China's No1 real estate firm by market value, signed a deal with US real estate firm Tishman Speyer to develop a planned luxury residential condominium tower in San Francisco early this year. It was the developer's first venture into the US market.

Source: ChinaDaily

US November Construction Spending grows 1% m/m seasonally adjusted

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during November
2013 was estimated at a seasonally adjusted annual rate of $934.4 billion, 1.0 percent (±1.6%)* above the revised October
estimate of $925.1 billion. The November figure is 5.9 percent (±2.0%) above the November 2012 estimate of $882.7
billion.

During the first 11 months of this year, construction spending amounted to $828.4 billion, 5.0 percent (±1.3%) above the
$788.8 billion for the same period in 2012.

PRIVATE CONSTRUCTION

Spending on private construction was at a seasonally adjusted annual rate of $659.4 billion, 2.2 percent (±1.2%) above the
revised October estimate of $644.9 billion. Residential construction was at a seasonally adjusted annual rate of $345.5
billion in November, 1.9 percent (±1.3%) above the revised October estimate of $339.2 billion. Nonresidential
construction was at a seasonally adjusted annual rate of $313.9 billion in November, 2.7 percent (±1.2%) above the
revised October estimate of $305.7 billion.

PUBLIC CONSTRUCTION

In November, the estimated seasonally adjusted annual rate of public construction spending was $275.0 billion, 1.8
percent (±2.5%)* below the revised October estimate of $280.2 billion. Educational construction was at a seasonally
adjusted annual rate of $65.2 billion, 1.1 percent (±4.9%)* above the revised October estimate of $64.4 billion. Highway
construction was at a seasonally adjusted annual rate of $82.0 billion, 0.4 percent (±5.3%)* below the revised October
estimate of $82.4 billion.

Asia hopes developed economies rebound, will help their growth

     According to a report from the wall Street Journal,"Asia is hoping that a rebound of developed economies,will restore their economies to a healthier growth trajectory".

But data released Thursday, the first of the new year, shows that demand from the U.S. and Europe is playing a less important role in many Asian nations than in the past".

Purchasing managers indexes, a proxy for gross domestic product, signaled that manufacturing activity in the region continues to expand. The pace of expansion, though, slowed in some countries and export orders remained generally weak, signaling a pickup in the U.S., Europe and Japan is failing to jump-start Asia's export-dependent economies.

    HSBC's China PMI slipped to 50.5 in December from 50.8 in November, a day after China's official PMI fell to 51.0 in December from 51.4. Any result above 50 indicates expansion, while one below that shows contraction.

The "new export orders" subcomponent of the PMI contracted. That has confounded some observers, who were expecting stronger numbers given a recovery in the U.S., which many economists expect to grow by 3% in 2014, and Europe's tentative exit from recession.

"Today's numbers really do point to a structural problem for Asian exports," said Frederic Neumann, a Hong Kong-based economist with HSBC. "The headline numbers suggest steady growth across Asia, but the trade cycle isn't really firing up."

   In part, Asia has become less dependent on the U.S. In 2012, 13.6% of East Asian exports went to the U.S., down from 23.8% in 2000, according to the Asian Development Bank. Local demand is playing a larger role in many economies, particularly China, and intra-regional trade has become more important.

Some of the data on Thursday was more positive. In Taiwan, an integral part of global electronics production, the HSBC PMI rose to 55.2 from November's 53.4, its biggest jump since April 2011. New export orders were at a 32-month high. An official PMI for Taiwan also rose, to 53.6 from 52.0 in November. South Korea's HSBC PMI rose to 50.8 in December from November's 50.4.

Taiwan, like South Korea, is more exposed to the U.S. than China. Taiwanese exports account for about three-quarters of GDP, compared with around a quarter for China. Taiwan's solid export orders in recent months might be linked to global smartphone orders, which can be volatile, many analysts say.

Other economies in the region that rely more on domestic demand or export more to China than the West, notably Indonesia and India, also are failing to benefit from better industrialized world demand.

Some analysts said they expected Asia's economies to show improvements in the year ahead as the U.S. consumer becomes more confident. That will benefit countries like South Korea and Taiwan that make electronics, autos and other goods for Western markets.

But others were less sanguine. "One of the key takeaways is that unlike in the past, the correlation between Asian exports and [U.S. manufacturing] has become weaker, suggesting that a lot of the U.S. pickup is domestic-based and hasn't fed through to Asia," Mizuho Securities chief Asian economist Vishnu Varathan said.

The Chinese New Year

Chinese New Year is celebrated worldwide to mark the first day of the New Year in the Chinese calendar, which differs from the Gregorian calendar. It is also known as the Spring Festival or the Lunar New Year and celebrations can last for about 15 days.

The Chinese New Year for 2014 is on January 31 and marks the start of the Year of the Horse,in the Chinese Zodiac.

   The horse is one of 12 animals in the Chinese zodiac (Shēngxiào, or 生肖), which is based on a 12-year cycle.

How does the Chinese zodiac work?

Each of the 12 years in the Chinese zodiac cycle is represented by an animal associated with five elemental signs. The animals are:

• Zi (rat)
• Chou (ox)
• Yin (tiger)
• Mao (rabbit)
• Chen (dragon
• Si (snake)
• Wu (horse)
• Wei (sheep)
• Shen (monkey)
• You (rooster)
• Xu (dog)
• Hai (boar/pig)

The zodiac traditionally starts with the Year of the Rat and cycles continuously. These animal signs are calculated in accordance with the Chinese calendar, which is lunisolar and predates the Gregorian calendar. The Chinese calendar is based on exact astronomical observances of the sun’s longitude and the moon's phases.

Zodiac animal and human connections

According to the Chinese zodiac, your birth year tells you more than just your age. It is believed that there is a special relationship between people and the animals in the Chinese zodiac. This belief, which can be traced back to the Han Dynasty (206 BCE – 220 CE), is based on the idea that one's personality is affected by the animal their birth year is associated with.

It is also believed that some relationships are more compatible than others depending on one’s zodiac (like the western astrological zodiac based on months). Unlike the western zodiac, the Chinese zodiac animals are not associated with constellations.

There are also 5 elements in the zodiac associated with the animals and their personalities:

• Wood
• Earth
• Fire
• Water
• Metal

As the year 2014 is the Year of the Wood Horse, it is believed that those born under under this sign are going to have a good year, with plenty of luck and opportunities ahead.

The Year of the Horse

The Year of the Wood Horse (Wu) starts on January 31, 2014, and ends on February 18, 2015, in the Gregorian calendar. It comes after the Year of the Snake (Si) and before the Year of the Sheep (Wei) in the Chinese calendar. During Spring Festival, people put up symbols of the horse, as well as the "happiness" sign, in their homes.

Horse personalities

People born in the Year of the Horse are believed to be hard-working, high-spirited, smart, sophisticated and talented. It is also thought that Horses do not like to be restrained and tend to be impatient.

Careers and Compatibility

According to superstition, if you are born in the Year of the Horse, you are most content as a journalist, lawyer, publicist, or within the fields of sport or travel. It is also believed that the Horse is most compatible with the Dog and the Tiger, but least compatible with the Monkey and the Rat.

Source:  timeanddate

US Initial Claims December 28th,2013.

Released On 1/2/2014 8:30:00 AM For wk12/28, 2013 Prior Prior Revised Consensus Consensus Range Actual New Claims - Level 338 K 341 K 338.5 K 325.0 K to 350.0 K 339 K 4-week Moving Average - Level 348.00 K 348.75 K 357.25 K New Claims - Change -42 K -39 K -2 K

Highlights Clouded by holiday adjustment issues, initial claims were little changed in the December 28, down 2,000 to 339,000. In an offset, the prior week is revised 3,000 higher to 341,000. The 4-week average is not favorable, up a steep 8,500 to a 357,250 level that is more than 30,000 above the level in late November. Continuing claims are mixed, falling a sharp 98,000 in the latest available data which are for the December 21 week. But the 4-week average is up, at 2.858 million which is nearly 60,000 above the month-ago comparison. The unemployment rate for insured workers is at 2.2 percent for a third straight week, up from 2.1 percent through most of November. The high reading for the 4-week average would be a negative indication for the December jobs report if not for the holiday related volatility. This report won't begin to smooth out for a couple of weeks yet. Source: Bloomberg

Chinese Stocks fall On Poor Manufacturing data

Asian stocks put in a mixed performance on Thursday, as Chinese markets digested poor manufacturing data and Thai equities fell to their lowest level in over a year, while the situation in Indonesia was more positive following a trade report. 

According to two separate reports, activity growth in China's manufacturing sector eased in December, pushing the Hang Seng China Enterprises Index down 1%.

The government's official manufacturing purchasing managers' index (PMI), released on Wednesday, fell from 51.4 to 51, missing the 51.2 expected by analysts, while today's HSBC/Markit survey showed that the manufacturing PMI declined from 50.8 to 50.5, broadly in line with forecasts.

"Both of these figures are still above 50, indicating growth, but if we continue to see declines here, people are going to start to worry about whether China can maintain such high growth rates in 2014," said Market Analyst Craig Erlam from Alpari. 

"Last year, only a targeted stimulus programme from the government prevented growth falling below 7%, these figures suggest similar efforts may be needed in 2014," he added.

Over in Bangkok, the Thailand SET dropped 3% late in the session, dropping to its lowest level since late 2012, ahead of an election which has already been met with strong protests, prompting fears that it will result in a political crisis. 

A November trade report from Indonesia prompted the JSX to climb more than 1% late in the session after it showed the country's trade surplus was much higher than expected at $776.8m, compared to a $57m deficit. 

In Tokyo markets were closed for a public holiday. 

Source: LiveCharts

Global shares start year in slow motion, yen resumes decline

     Asian Markets got the new year off to a sluggish start as Chinese economic data disappointed ahead of a raft of reports on global manufacturing due out through the session.

The early action was in currencies, where the yen resumed its long decline as investors used it to fund purchases of higher-yielding assets abroad.

Japan's Nikkei was closed on Thursday but ended 2013 with an annual gain of 57 percent. Many analysts look for a further advance this year as the Bank of Japan remains committed to its massive stimulus The drop in the yen has been viewed as positive for Japanese exports and corporate earnings, and a major reason its share markets outperformed all others last year.

Nomura's global strategy team is forecasting that Japanese equities will provide the greatest return of all global stocks in 2014, thanks in large part to rising corporate earnings.

MSCI's broadest index of Asia-Pacific shares outside Japan ended last year essentially flat, which was where it was at on Thursday. Korean shares eased 0.3 percent, as did stocks in Shanghai.

Not helping was a drop in China's official Purchasing Managers' Index (PMI) to 51.0 in December, from 51.4 the previous month and below forecasts for 51.2.

Analysts at Barclays noted the pullback of activity in the survey was broad-based across industry sectors and sizes.

"Besides the need for deepening reforms and addressing structural issues such as reducing overcapacity and controlling local government debt, we think elevated interest rates across the money, bond and credit markets have led to higher funding costs, hurt corporate sentiment and thus weigh on economic growth," they wrote in a client note.

They expected China's central bank to maintain its tightening bias for a while yet.

Better news came from South Korea where manufacturing activity picked up to its strongest level in seven months.

Markets reacted to the China data by knocking the Australian dollar down a quarter of a U.S. cent. China is Australia's single biggest export market and the currency is often used as a liquid proxy for risk in the Asian giant.

For other major currencies the main themes continued to be weakness in the yen and resilience in the euro.

The euro was a shade softer on the dollar at $1.3763, but still not far from its recent two-year peak of $1.3892.

Dealers suspect the single currency has been supported by the repatriation of funds by European banks and a large and expanding current account surplus in the euro zone.

But there remains a general assumption rising U.S. Treasury yields will eventually lift the dollar up on the euro. Yields on U.S. 10-year paper are up at two-and-a-half year highs of 3.03 percent. Even shorter-dated rates have been rising as improving U.S. economic data justifies the Federal Reserve's decision to start tapering its asset-buying stimulus.

Outgoing Fed Chairman Ben Bernanke is giving a speech on Friday and may offer more guidance on the outlook for tapering.

Source:  Reuters

Sprint Wants To Revive Nextel As A Business Brand, Merge Boost + Virgin Mobile Into ‘Sprint Freedom’

It was only six months ago  that Sprint decommissioned and shut down the Nextel iDEN push-to-talk network, and while the carrier has no plans to bring that legacy service back, the brand is another story.

According to a source close to the company, Sprint wants to introduce Nextel again — as a brand for business services. The source tells TechCrunch that this is part of a larger branding overhaul coming in Q1 in which Sprint plans to launch a new prepaid brand called “Sprint Freedom” — merging Boost and Virgin Mobile.

It also fits with the idea of Sprint – now majority-owned byJapan's Soft-Bank  marching on in consolidation mode, shoring up to present a more competitive face against the likes of AT&T and Verizon. Most recently, Sprint has been reportedly preparing an offer  for T-Mobile USA, its latest move after acquiring Clear and buying a portion  of U.S. Cellular earlier this year.

The Nextel service, our source says, will be part of a bigger push to court business customers. That makes some sense: Nextel’s existing business subscriber base, and brand recognition with that segment, were seen as some of the main reasons  behind Sprint’s $35 billion acquisition of the company in the first place.

The new Nextel business, says the source, will be underpinned by more service streamlining: it will be a “premium” offering consisting of the 4G fixed and mobile broadband services that were originally the Clear business. The Nextel name, our source says, will go “on top of everything that was Clear and then target businesses.”

Along with previously-Clear services, there will also be more devices introduced, specifically around Sprint Spark — the tri-band LTE service debuted ealier this year that gives users faster speeds and more reliable connectivity.

Introduced with smartphones from HTC (the One max), LG (G2) and Samsung (Galaxy Mega and Samsung Galaxy S4 mini), Sprint Spark will be extended with two hotspots and three tablets as part of the offering.

And with that, some changes also around pricing, apparently. “Unlimited data options will come back for the hotspots at a premium, but pricing will be tiered by speed,” the source claims. Sprint will also introduce group plans that will apply to the new Nextel devices.

Source: TECHINASIA

How Alibaba and Tencent went head-to-head in 2013

What to look out for in 2014

Over the past few months it’s become clear that Tencent and Alibaba are butting heads over who will get access to Chinese consumers’ wallets. Alibaba has access to the de-facto channels of consumer purchases – namely, Tmall and Taobao. But Tencent has users’ attention with WeChat.

A high-profile catfight emerged in late 2013 between the two tech giants. It began when Alibaba revoked the Taobao search feature , which was an add-on service rolled out earlier in the year, from WeChat days before the v5.0 update, along with other WeChat channels on its e-commerce sites. Tencent later retaliated by blocking Laiwang invites on WeChat. Even Sina Weibo was dragged into the mess briefly when it temporarily suspended content sharing on WeChat, though the feature was brought back quickly. According to a report from Barron's of the 20th December 2013,  "Wedge Partners analyst Juan Lin thinks Sina is doing so only because users are losing interest in Weibo:

We think Weibo reopened the content sharing function to Wechat due to the pressure for Weibo to grow traffic. Due to the lowered quality of Weibo content and competition, Weibo platform is no longer as attractive to users as the primary social platform. The real competition, however, is between Tencent and Alibaba.

Increasing number of Taobao merchants now use Wechat as a new marketing channel, and more and more Wechat users are now making purchases on Taobao’s mobile app directly, through the links shared in Wechat.

Users can make direct payments on Wechat through Tencent’s own payment tool Tenpay.

With the high penetration of Wechat (over 600 million users), Tencent may once again directly compete against Alibaba with its existing ecommerce business.

It’s worth noting that although Tencent and Alibaba have clashed over e-commerce, WeChat’s still in the early stages of its monetization, and it’s not yet crystal clear how it big its influence over m-commerce will be.

Meanwhile, Alibaba remains the uncontested master of all-things e-commerce in China, and for the time being, m-commerce as well. It brought inover $5 billion in sales revenues  in a single day in November on China’s equivalent of Cyber Monday,21 percent of which came through purchases made on mobile devices.

As for what will come next year, expect Tencent to throw in even more features on WeChat that drive revenues – more games, more shopping, more paid app upgrades, and more online-to-offline payments via QR codes. Expect Alibaba to develop its Alipay Wallet mobile app by adding more offline payment options, and perhaps by adding some social features. 2014 and 2015 will be pivotal years for these two firms as WeChat tightens its grip over users’ mobile habits, and Alibaba tries to find ways to avoid getting losing revenues in the process.

Source: TECHINASIA

Japan population shrank at fastest pace since WWII

Japan's population shrank last year at its fastest pace since the end of World War Two. This marks the 7th straight year of decline.

A health ministry survey shows that one million 31 thousand babies were born in 2013. That's down 6 thousand from the previous year and the fewest since the end of the war.The estimate also shows one million 275 thousand people died last year. That's an increase of 19 thousand from the year before and the most after the war.
These figures show Japan's population dropped by 244 thousand last year.
Ministry officials add that 663 thousand couples got married, and 231 thousand couples got divorced last year.

Source: NHK

Japan: New Year worshippers crowd Meiji Shrine

Worshippers are packing into a major shrine in Tokyo on New Year's Day to pray for good luck for the coming year.

Visitors started forming a long line at Meiji Shrine at around 10PM on Tuesday, New Year's Eve. Families and couples were among the crowd.At midnight, the sound of a drum resonated throughout the premises. This was the cue for worshippers to begin prayers, and throw monetary offerings into a large, fenced-off collection space.
Worshippers traditionally buy good luck charms and arrow amulets. They also write their wishes on wooden plaques.

Source: NHK

Germany urges Japan to deal 'honestly' with WWII past

Germany said Monday it tried to deal "honestly" with its World War II past and urged Japan to do the same after Prime Minister Shinzo Abe's visit to a controversial war shrine.

"I do not wish to comment on questions related to Japanese domestic politics," Chancellor Angela Merkel's spokesman Steffen Seibert told reporters when asked about the surprise Yasukuni shrine visit which enraged China and South Korea."But in general all nations must honestly live up to their role in the horrible events of the 20th century. Only on the basis of this honest accounting is it possible to build a future with former foes. This is a conviction Germany takes to heart and which in my opinion applies to all states." Abe sparked anger in China and South Korea last week by visiting the Tokyo shrine, which honours Japan's war dead, including several high-level officials executed for war crimes after World War II, and serves as a reminder of Japan's wartime aggression.

Source: AFP

China rules out dialogue with Japanese PM Abe

China said Monday it will not hold dialogue with Japanese Prime Minister Shinzo Abe until he acknowledges "mistakes he has been making one after another" on bilateral issues since taking office a year ago.

Foreign Ministry spokesman Qin Gang said Abe "has fully exposed his hypocrisy" in his claims of attaching great importance to relations with China and holding dialogue with Chinese leaders, most recently, by visiting the war-linked Yasukuni Shrine in Tokyo last week."In fact, Abe himself closes the door of dialogue with Chinese leaders. Chinese people do not welcome him," Qin told a regular news conference. "What Abe should do now is admit his mistakes."

Source: Kyodo

S. Korea's Park raps Japan after Abe's Yasukuni visit

South Korean President Park Geun Hye expressed hope Monday that the coming year will be free of incidents that dig up "wounds from the past" and hurt international trust, the presidential Blue House said, in an apparent criticism of Japan.

Park's remarks during a meeting with senior government officials appeared to be aimed at Japanese Prime Minister Shinzo Abe's controversial visit last week to the war-linked Yasukuni Shrine in Tokyo, although she did not name Japan or the premier.A country that repeats acts that do not coincide with universal values and standards of the international community will never be credited as a first-class nation, no matter how it thrives economically, Park added.

Source: Kyodo

Abenomics in 2013: Is Japan back?

On the final day of trading 2013, Japanese shares closed with an annual gain of 57 percent the highest ever since 1972. That this occurred this year is no coincidence - Shinzo Abe's three-pronged strategy for Japan's economy dubbed "Abenomics" is working. For now.

After Japan's "lost decade" puzzled economists for years, Shinzo Abe in his second term as Prime Minister, with Bank of Japan Governor Haruhiko Kuroda, demonstrated that Japan hadn't in fact tried everything in its economic toolkit. The surge in Japan's equity markets this year was largely driven by a renewed inflow of foreign capital, bullish on the prospects of Abe's economic policies.Fortune hasn't been kind to Japan in recent years - the nascent signs of economic recovery in 2008 were dashed by the housing bubble bursting in the United States that turned global finance topsy-turvy. Japan suffered a 0.7 loss in real GDP that year and faced a catastrophic contraction in 2009 when it suffered a staggering 5.2 percent loss in real GDP. After the DPJ came to power, poised to turn Japan's economic fortunes, there was little in the way of an economic breakthrough as the Bank of Japan refused to behave boldly. After the Tohoku Earthquake and the ensuing disaster at Fukushima in March 2011, Prime Ministers Naoto Kan and Yoshihiko Noda were left as economic lame ducks, ultimately leading to Abe's return at the end of 2012.
At its core, Abenomics worked in Japan because it addressed Japan's low nominal growth rate as the disease inhibiting the growth of demand. Furthermore, it recognizes that boosting nominal growth will allow Japan to eventually shed its immense public debt, which was accumulated over 20 years of economic sclerosis and stagnation. Abe and Kuroda were able to address the average Japanese consumer, the national public debt, and woo foreign investors in one fell swoop.
If Abenomics succeeded in 2013, its success may likely have been a fluke. After Abe appointed Kuroda, the pair set out into uncharted waters, determined to bring Japan back on top. Abenomics emblematizes the sort of Keynesian demand side approach to macroeconomic policy that was long necessary in Japan but either political unfeasible or perceived as too risky. As someone who intermittently visited Tokyo twice a year for the past three years, Japan's economic transformation is palpable and frankly remarkable given the time frame. That the yen's depreciation against the U.S. dollar (around 25 percent in 2013) jump-started consumer spending can't be denied.

Source: The Diplomat

New Year Celebrations in Hong Kong

More than 300,000 local residents and tourists gathered at both sides of the Victoria Harbor and other attractions in Hong Kong Special Administrative Region (SAR) to celebrate the new year and express goodwill wishes for the SAR on Tuesday evening.

Due to the transition of the year 2013 to 2014 (1314) has a particular meaning "for one's whole life" or "with lifetime" in Chinese language, many couples in Hong Kong and other places of the Greater China region choose the night to make confession or just stay together.

At Golden Bauhinia Square along the Victoria Habor on the Hong Kong island, thousands of people witnessed ten-second countdown shown in a giant LED display. On the other side of the harbor, Tsim Sha Tsui, people enjoyed the best view of fireworks shows which was launched just at the beginning of the new year.

"We came here to celebrate the new year with friends and their families and wish a better year for us and for all the people living in Hong Kong," said Liu Xia. "My husband especially likes the special meaning of the transition although he can not speak Chinese."

Liu's husband Philip, a British citizen who operated several factories in mainland China and lived in Hong Kong for more than 30 years, said everyday in Hong Kong is like a party. "I wish Hong Kong could keep its vitality in the new year to continue to be a bridge between China and the rest of the world."

Philip said he was concerned about appreciation of Renminbi and rising labor costs in the Pearl River Delta region which could impair Hong Kong's role as an international financial center.

According to statistics from Hong Kong Trade Development Council, about 55 percent of the costs of Hong Kong companies' products manufactured in the mainland were paid in RMB. Every percentage point the RMB appreciates could add 0.55 percentage point to value of Hong Kong companies' products.

On the last day of 2013, the central parity rate of the RMB against the U.S. dollar rose to 1:6.09, the record high of the year. The RMB also showed an appreciation trend against the Hong Kong dollar in the year.

Anita Fung, CEO of HSBC Hong Kong, said that Hong Kong is losing her competitive edge in RMB offshore business when more countries and regions have started similar businesses.

"If Shanghai became the international financial center in 2020, and then RMB has become convertible, Hong Kong can no longer enjoy the benefit as the sole RMB offshore center," Fung said.

How to keep Hong Kong's advantages in the economic relations with the mainland will be a serious question for the SAR's government in the next year, Philip said.

However, tourists from mainland China enjoyed their shopping spree in Hong Kong thanks to the RMB's appreciation and the SAR's famous low tax rate policy.

Ms. Ye Jieru and his mother who came from Zhejiang Province found many surprise when shopping at Causeway Bay, Hong Kong. " Many commodities have the same price tag compared with the mainland but they are paid in Hong Kong dollars, which is more than 20 percent off, and more have even lower!"

"I think low tax rate policy is one of the attractions of Hong Kong," Philip said, "the government should improve service industry and create more reasons for enterprises from Chinese mainland and overseas to believe Hong Kong is the best choice for them to have their businesses being connected."

Source: Xinhua

China's manufacturing PMI drops to 51% in December

China's purchasing managers' index (PMI) for the manufacturing sector dropped to 51 percent in December, down from 51.4 percent in November, according to official data released on Wednesday.

December marked the first time since June 2013 that the manufacturing PMI declined, according to a statement jointly released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP).

In December, the sub-index for production stood at 53.9 percent, down 0.6 percentage points from November, while the sub-index for new orders lost 0.3 percentage points to 52 percent, said the statement.

The sub-index for purchase quantity moved down 0.9 percentage points to 52.7 percent in December, while the sub-index for new export orders stood at 49.8 percent, down 0.8 percentage points from November.

Major PMI compounds all declined in December, indicating downward pressure on the economy, said Zhang Liqun, an analyst with the Development Research Center of the State Council.

He said the fall of the PMI in December reflected the fall in market demand and a cautious attitude by enterprises toward the future market.

Zhang predicted that China's industrial growth and export growth may fall in the future and the downward pressure of the Chinese economy will still remain.

But Zhang also added that economic growth is still in a process of stabilizing. "In general, the country's economy is still on the course of stabilization," he said.

A PMI reading below 50 indicates contraction, while one above 50 signals expansion.

The HSBC flash manufacturing PMI for December eased to 50.5, compared to 50.8 in November and 50.9 in October, according to HSBC's preliminary PMI released in mid-December 2013.

According to Qu Hongbin, chief China economist with HSBC, the December HSBC flash manufacturing PMI reading slowed marginally from November's final reading, but stood above the average reading for the third quarter,which implied that the recovery trend in the manufacturing sector that started in July still holds.

Source:  Xinhua

President Xi Jinping expressed his confidence in China's reform. Whose purpose is to make the country rich and strong, the society fair and just and people's lives better.

President Xi Jinping expressed his confidence in China's reform and extended good wishes to all Chinese in his New Year address Tuesday.

"In 2013, we made an overall arrangement on comprehensively deepening reform, drawing a grand blueprint for the country's future development," Xi said in the address via state broadcasters.

"In 2014, we will make new strides along the path of reform."

The fundamental purpose of the reform is to make the country rich and strong, the society fair and just and people's lives better, he said.

Addressing domestic and overseas audiences, Xi called on the people to fight hard together for this great cause.

"We have numerous glories in the name of the great cause of reform and opening-up. I firmly believe that new glories are awaiting the Chinese people," he said.

"We welcome a 2014 that is full of hope," Xi said, extending his New Year greetings to compatriots in Hong Kong and Macao, compatriots from Taiwan, overseas Chinese and friends from various countries and regions across the world.

Xi wished the elderly health, children happiness and every family felicity and safety.

According to Xi, numerous workers, farmers, intellectuals and cadres are still serving at their posts; many compatriots around the world are still diligently working for their motherland; many People's Liberation Army and Armed Police soldiers and officers as well as police are performing their glorious duties.

"Some of them are far from the motherland and their relatives, and some can't reunite with their families," said Xi. "On behalf of the homeland and its people, I bid the sincerest greetings to them and wished them peace and safety."

Xi said that 2013 was a very unusual year for the country and the people as the Chinese people jointly overcame various difficulties and challenges and won prominent achievements.

"These precious achievements contained people's sweat and blood, and I thank you from the bottom of my heart," Xi said.

Xi said that more than 7 billion people live together on the planet, and they should help each other and work together to weather hardships and seek common development.

Xi said that the Chinese people are pursuing the Chinese dream to realize the nation's great rejuvenation, and expressed his hope that people from various countries could realize their dreams too.

"I sincerely hope that people from all countries, while striving for their own dreams, can understand and help each other, and make efforts to build our Earth into a wonderful homest," Xi said.

"Life is always full of hope, and success always belongs to people who strive hard and never give up," he said.

Noting various risks and challenges ahead, Xi admitted that "a huge amount of work" need to be done in order to ensure a better life for the people.

"Let's be modest and discreet, and work hard to jointly compose a new chapter for the development of our great motherland," Xi said.

Source: Xinhua

2014, Better for US GDP Growth, than for US Stock Markets?

       According to a report from the Wall Street Journal, "economists aren't known for their forecasting flair, but they got 2013 pretty much right, correctly reckoning that increased taxes and decreased federal spending would drag on growth at the start of the year, and gradually fade. The consensus among economists surveyed by The Wall Street Journal last January called for gross domestic product to grow a tepid 2.3% from the fourth quarter of 2012 to the fourth quarter of 2013—which looks close to the mark".

Wall Street stock-market strategists, on the other hand, didn't do a very good job at all, projecting that the S&P 500 would rise 8.2% in 2013, according to a Birinyi Associates survey. It rose 30%.

  Even though U.S. corporate profit margins seemed stretched to the breaking point at the end of 2012, they expanded more in 2013. More important, stock valuations got considerably richer: At the end of 2012, the S&P traded at 12.4 times expected earnings, according to FactSet, and now the forward price/earnings ratio is 15.4.

Going into 2014, the economy is poised to do a lot better than last year. The drag on growth from the fiscal tightening that ushered in the start of 2013 is mostly gone. Recent reports show that both hiring and capital spending—two aspects of the economy that have been decidedly disappointing in recent years—have begun to pick up.

A number of economists, including some who have been fairly downbeat throughout the recovery, like Jan Hatzius of Goldman Sachs and Ethan Harris of Bank of America/Merrill Lynch, are forecasting GDP in the fourth quarter of 2014 will be at least 3% higher than year earlier. That would mark the best year since 2005.

''But better hiring and capital spending aren't the stuff of expanding profit margins. So investors can't count on earnings at companies' U.S. operations advancing any faster than the economy.

A better economy also will set markets to wondering about when the Federal Reserve will start raising short-term rates. This could pique worries that yield-hungry investors will shift money away from stocks into fixed-income products.

And a better economy will make for improved investment opportunities away from financial markets. There has been a dearth of new business formation in recent years; perhaps 2014 will see more people cashing in some of their stock-market wealth to try something new.

It is, of course, possible that despite such hurdles, 2014 will be another big year for the stock market. A rerun of this year's rally would be built on unsustainably high profit margins as well as valuations that were even more strained''.

WSJ: As 2014 Dawns, Fortunes Hinge on Central Bankers

    According to a report from the Wall Street Journal,''in year 2013, developed-economy stock markets posted double-digit-percentage gains as easy-money policies washed over concerns about growth in economies still hobbled years after the financial crisis''.

''For 2014, many investors see little on the horizon to shift attention away from monetary policy, even as hopes rise again that the U.S. economy is finally moving into a slightly higher gear''.

"In being so aggressive, monetary policy tends to swamp everything else," said Dennis Stattman, manager of the $59 billion BlackRock Global Allocation fund. Even in the U.S., where the Federal Reserve is set to trim its monthly bond purchases by $10 billion in January, "some kind of very easy money is going to be with us for a very long time."

''While much of the focus in 2013 was on the prospects for less stimulus from the Fed, as the year drew to a close more investors were keeping an eye on declining inflation rates across developed markets, especially in Europe. The lingering threat of deflation, they said, could result in monetary policy being looser than expected, fueling continued rallies in stocks and keeping bond yields relatively low''.

William Stromberg, head of equity at T. Rowe Price Group Inc., which manages $647 billion, is in the camp of those seeing more sustained good news on the economy, which should help the prospects for stocks.

The downside, said Mr. Stromberg, is that stronger growth could cause some indigestion for financial markets as the Fed responds by tightening monetary policy. The result could be a "minicorrection" for stocks, but with interest rates generally staying low, inflation low and growth stronger, "we're still in the sweet spot."