China served as a major topic of discussion and a primary source of concern at the World Economic Forum. However, several speakers went to great lengths to defend Asia’s largest economy and to point out that it is still moving toward strong growth and a “manageable” economic transition.
No Cliff
For years, the European Union (EU) has imposed tariffs on Chinese-made screws, nuts, and bolts made of either iron or steel. However, on Monday, China won an appeal in a seven-year legal battle before the World Trade Organization, which found that those tariffs are illegal. Although China has never before sought sanctions from the WTO, many believe the length of this battle may cause the trade giant to make a claim for compensation.
At the World Economic Forum, Argentine President Mauricio Macri made positive headway with U.S. and European leaders, according to the Associated Press. Investors and the world community praise his reform approaches, such as slashing export taxes and lifting restrictions off the peso. The center-right president replaced leftist leader Christina Fernandez de Kirchner in December.
Japanese stocks officially entered a bear market on Wednesday and continue to see pressure, despite quantitative easing measures that propped up stocks in years past. The Japanese Topix index fell 3.7 percent in a day and lost over 20 percent of its value from its peak last summer. The Nikkei 225 fell a similar amount by the close, leading to an almost 14 percent year-to-date loss.
While forest fires may represent a common sight around the world, as is the damage they wreak, few regions have suffered more economic harm, as a percentage of GDP, than Indonesia did in 2015. Last year, Indonesia’s fires cost the economy at least $16 billion. That amounts to 1.9 percent of Indonesia’s gross domestic product (GDP), according to the World Bank.
According to finance minister Arun Jaitley, India’s economy may grow as much as 9.0 percent annually, but only under the right economic conditions, according to CNN Money. The South Asian country achieved significant growth in 2015, but it was held back due to such factors as a decline in the steel industry and a heavy monsoon season. India remains the fastest growing major market in the world, outgrowing China.
Retail sales enjoyed strong end-of-year gains, with e-commerce growing at a rapid rate. In total, retail sales in brick and mortar stores rose 3.1 percent year-over-year in December, according to a new study by the National Retail Federation.
When oil prices began to decline in 2016, Russia’s oil-dependent economy began to slump. Unfortunately, that slump does not appear to be righting itself very quickly, and may even deepen with the introduction of long embargoed Iranian oil to the market this year. As a result, the International Monetary Fund (IMF) has again slashed its forecast for Russia, downgrading it into an ongoing recession through the end of 2016 and beyond.
Secretary of the Treasury Jacob Lew will meet with Puerto Rican officials on Wednesday to address the island’s mounting debt crisis. Puerto Rico has defaulted twice on its payments and it suffers with a high public debt of $72 billion, and the secretary hopes that the U.S. Congress will act by March of this year. The commonwealth’s deficit expects to stretch from $14 billion to $16 billion in the coming five years.
Slowing home sales, falling property values, and growing unemployment are ringing alarm bells in oil-dependent Houston. Last week, the Houston Association of Realtors released a report showing that home sales are falling. In total, single-family home sales fell 2.4 percent on a year-over-year basis in 2014.
