It is a strange world if I can greet with pleasure two reports, which actually shame my own country. However, alas, it is so. In the UK, two excellent examinations of food poverty have been published just as Westminster is arguing over whether the government’s tax credits cuts are excessively punishing poorer working families. The timing could not be better.
There has been speculation that Australia’s recent change in prime minister from Tony Abbott to Malcolm Turnbull will mean a shift in Australia’s choice of partners in Asia. The change does not mean that Australia will now ‘choose’ China over the United States. However, it could change what Australia means by its ‘choice’ of the United States.
China’s new development blueprint seeks to realize a moderately prosperous society by 2020.
At the recently concluded Fifth Plenum of the 18th Communist Party of China Central Committee, the “Four Comprehensives” became the grand blueprint for the 13th Five-Year Plan (2016-20). Each of the four tasks requires broad measures and pragmatic actions.
A moderately prosperous society
American manufacturing activity is growing at a slower pace, while deliveries to suppliers are slowing and construction remains near flat.
The AKP won over 300 seats in parliament, allowing the party to regain single rule that was lost over the summer. However, the majority parliament is not enough for President Tayyip Erdogan to change the country’s constitution and amass more executive power. In response to the victory, the nation’s stock index gained 5.0 percent, and the Turkish lira jumped 3.6 percent.
China’s latest five-year plan, the details of which were endorsed at last week’s fifth plenum, aims to double the nation’s GDP and per capita income by 2020 (from 2010 numbers).
The 2020 deadline is important because it is the final year of the 13th five-year plan and the first plan led by Xi Jinping and Li Keqiang. It would allow the Chinese Communist Party to claim a doubling of the country’s economic size in the decade preceding the 100th anniversary of the Party’s founding in 1921.
EM starts the week on a mixed footing. Turkey is the star performer from the surprise result of the elections that ended the period of political uncertainty, but there was limited spill over to other EM markets. Energy prices are still under pressure, weighing on sentiment. On the other hand, prospects of further easing in Europe have helped boost sentiment in equity markets, even as markets remain split on a December Fed hike.
International scrutiny of Japan’s foreign policy direction and defence policy posture has been particularly intense in recent months. Prime Minister Shinzo Abe’s 14 August statement on the 70th anniversary of the end of World War II, and security legislation passed on 19 September have brought renewed attention to the topic.
The Trans-Pacific Partnership (TPP) agreed to on 5 October 2015 covers almost a third of world trade and 40 percent of global GDP. By not being part of the TPP, India risks losing out. According to a Center on Global Trade and Investment study, India’s nominal GDP is likely to trim by more than 1 percent because of trade and investment diversion caused by the TPP. The ensuing negative effects on India’s economy by way of revenue and job losses will be large.
With the exception of such sectors as agriculture and services, the overall economy contracted, partly stemming from sluggishness in the world economy, according to the New York Times.
The economy grew 0.5 percent in the third quarter, a slowdown when compared to 0.7 percent seen from the previous quarter. Economists expected at least 0.6-percent growth. The drop in growth may cause Britain’s central bank to think twice about raising interest rates in the near future.
