China released its first quarter Gross Domestic Product (GDP) tabulations in early April. The figure it quoted, seven percent, represented the worst rate of growth for the Asian economic power in six years. This caused many to fear a worsening slowdown of the Chinese economy. Yet, more bad news was still to come.
China’s revival of ‘South–South’ economic relations raises the opportunity of re-balancing global power. This could have profound implications for economic progress, including poverty reduction and structural change, in the developing world.
Reforms of the financial sector in Indonesia since 1997 have mitigated the key risk factors that caused the economic crisis of 1997. The first of these was structural weaknesses in the financial sector, particularly the banking system. The second was heavy borrowing by both the banking system and the corporate sector from foreign sources. Indonesia’s Central Bank had warned that the risk of losses due to the currency exchange rate of private and state-owned companies’ foreign debts are still high and continue to haunt throughout 2015.
Over the last week, Hungary (+4.8%), Brazil (+4.6%), and Russia (+4.4%) have outperformed in the EM equity space as measured by MSCI, while India (-4.5%), Thailand (-2.3%), and Egypt (-2.0%) have underperformed. To put this in better context, MSCI EM rose 1.6% over the past week (for the fourth consecutive weekly advance) while MSCI DM rose 1.6%.
According to the Bank of South Korea, the economy grew 0.8 percent in the first quarter, an uptick from 0.3 percent in the last quarter. The economy gained traction due to an increase in consumer spending and the construction sector.
In a move that affects an industry worth over $6 billion that stretches across two continents, the EU has warned Thailand that it must fix human rights abuses such as child slavery in its fishing industry.
Earlier this week, the EU said it would give the third largest seafood exporter in the world six months to fix human rights abuses in its fishing industry, or face a blanket ban that could cost over $500 million in lost sales to the economic bloc.
At a time when most of the news reports for large, industrialized nations seem mixed, at best, it may be time to look to other nations for investment opportunities. One surprising locale for big economic growth in the near future is North Africa.
Analysts predict that the Eurozone economy will gain traction as consumers have more money to spend from low oil prices, among other factors like the funds flooding the market from the ECB’s asset-purchase program. Economists expect per-quarter growth of 0.4 percent until 2016, including an annual growth rate of 1.4 percent for 2015 and 1.6 percent for 2016.
Economic growth in China continues to cool as manufacturing falls to its lowest output in a year.
According to the Purchasing Managers Index published by HSBC and Markit Economics, Asia’s largest economy saw its manufacturing industry contract in the lowest reading in a year. The PMI fell to 49.2 in April, far below expectations.
Xi Jinping’s recent announcement of the Four Comprehensives is crucial to reform in the Chinese Communist Party (CPC).
The Four Comprehensives are likely to be put forward as Xi’s contribution to the CPC theoretical canon, providing the ideological legitimacy for his reform and anti-corruption campaign. If this is the case, this new concept is an important means for analysing the future direction of Xi Jinping’s leadership and makes it clear that the current cycle of increased power centralisation and party discipline will continue.
