Asia Pacific

How did China's Productivity Find a Lower Gear?

China’s substantive economic slowdown following the 2008–09 global financial crisis has added fuel to the long-running debate over the sustainability of China’s growth model. Despite the government’s unprecedented stimulus package, the official statistics — though often accused of exaggerating real performance, especially in times of crisis — show that China nearly halved its pace of growth, from 13.5 percent per annum in 2005–07 to about 7 percent per annum in 2013–15.

Thailand Coup Leaders' Democracy is Lacking

More than two years since the coup, Thailand’s political situation remains volatile. The coup leaders have vowed to make Thailand more democratic and commit to political reforms. Yet the first draft of the military-sponsored constitution was rejected a year ago. The military was compelled to set up a new drafting commission, this time led by Meechai Ruchupan, a pro-junta legal expert, with a mission to win support from the populace for the new constitution.

Fiji's Rabuka Returns to Lead SODELPA

In September 2014, Prime Minster Voreqe Bainimarama’s FijiFirst party swept to victory in an election that heralded Fiji’s return to elected government, almost eight years after Bainimarama seized power in a military coup. In securing his position as a democratically elected leader, Bainimarama also confirmed a political truism in Fijian politics: whoever assumes power because of a coup, consolidates power through the first post-coup ballot.

Australians are Learning that They Need to Know the Chinese Languages

A spate of recently released policy documents from state governments in Australia speak clearly of China’s growing economic significance to their future. Each predicts rosy opportunities for two-way investment and a large bounty from inbound tourist flows.

Contained within the action plans are the means to realise these dreams through engagement, building relationships and the development of partnerships in terms, which express a shift from the transactional contact through trade to the interactional contact of service relationships.

Here is Your China Update

This is the period in the monthly cycle that China releases most of its high frequency data.  The process is well under way.  Over the weekend, China reported its reserve figures that suggested capital outflows have slowed.

Earlier today, China reported its largest trade surplus (in dollars and yuan) since January. 

With the help of a lending spree, Chinese officials have managed, apparently, to stabilize the economy.  Data due out over the coming days is likely to confirm this signal. 

How did China Accumulate so much Corporate Debt?

Since the mid-2000s, Chinese corporate debt has risen sharply as a proportion of GDP — from around 100 percent to 164 percent in 2015. By comparison, this ratio is 67 percent in the United States and 103 percent in Japan. The rapid build-up of debt has prompted concerns regarding China’s financial and macroeconomic stability.

Excess Industrial Capacity was not Part of China's Plan

Americans have a saying about an 800-pound gorilla in a room.  It refers to a person or organization so powerful that it can act unilaterally.  The British have an expression about an elephant in a room.  It refers to a "fact" or problem that is not being addressed. 

Malaysia's 1MDB Highlights Deeper Problems

The 1Malaysia Development Berhad (1MDB) scandal in Malaysia, which has recently become the subject of a high-profile lawsuit by the United States Department of Justice’s asset recovery initiative, highlights the problems with state-ownership in the Malaysian economy.

To prevent such scandals from recurring in the future, Malaysia must define the role of the government in business and develop adequate institutional arrangements to counter potential abuse by politicians.

Stay on Target: China's Slower Growth

Assuming no surprises in the second half of the year, China’s growth in 2016 will remain near the target of 6.5 percent reflecting structural transition in the mainland, secular stagnation in the West and post-Brexit tensions globally.

In mid-July, China’s second-quarter GDP figures beat estimates with a 6.7 percent expansion, thanks to support by a slate of stimulus measures from the government and the central bank.