World

<strong>Yuan losing sheen among Chinese exporters</strong>
China, USA, World

Yuan losing sheen among Chinese exporters

China has for long been promoting yuan as a formidable global tradeable currency, but in recent times it has not been able to match the soaring value and worth of the US dollar. The volatility, low returns, and unexpected shift in external demand for yuan has prompted the Chinese exporters to shift their loyalty to the US dollar. Chinese traders have read the market condition well and are certain of yuan’s depreciation against the dollar. US dollar has been performing well at the global stage and the US Federal Reserve has defined expectations and refrained from downgrading its interest rates due to looming inflation threat. The Chinese exporters are investing their capital in US assets for better returns. This perhaps is a negative trend for China and is a result of recent dwindlin...
Bypassing Barriers: China’s clever use of Mexico to penetrate U.S. markets
Asia, Market, USA, World

Bypassing Barriers: China’s clever use of Mexico to penetrate U.S. markets

China operates with a singular objective: to maximize profits, employing any means necessary. Recently, we have witnessed escalating tensions between the United States and China over trade relations. This conflict has significantly impacted the American market, prompting the U.S. government to impose substantial tariffs on Chinese goods imported into the country. However, China has ingeniously devised a strategy to circumvent these hefty tariffs while simultaneously reducing shipment costs. Chinese companies utilize Mexico as a back door to enter the US amid the ongoing trade war with the US. Many Chinese firms have moved to industrial parks in northern Mexico over the past few years to get closer to the American Market. Market Manoa Furniture in Monterrey producing recliners and plush...
Stupid, it’s the economy.
World

Stupid, it’s the economy.

James Carville, Bill Clinton’s political advisor famously said that when it came to elections it was the economy, stupid. This year’s presidential election is likely to prove no exception. Six months before that election, a constellation of economic risks is building both at home and abroad that could shake markets and cause another inflation spike. It could also precipitate a financial crisis as occurred on the eve of the 2008 election with the Lehman bankruptcy. Last week’s unprecedented and massive Iranian missile and drone attack on Israel underlines the risk that the Middle East conflict could widen in the run up to the presidential election. The war with Gaza is far from over and Hezbollah, an Iranian proxy, keeps firing rockets at Israel. A broader Middle East war could reverse ...
Asia, World

Why the US Economy Is Booming While China’s Is Collapsing

“Every so often, a grand thesis captures the world’s imagination,” began an article in the The New Yorker in 2008. “The latest … is that America’s time of global dominance is finished, and that new powers, such as China, India, and Russia, are poised to take over.” There has been no shortage of optimism about China since, like a 2011 Foreign Affairs headlined the “The Inevitable Superpower” and a 2018 piece from The Economist that “The Chinese century is well under way.” What a difference the past few years have made. Conventional wisdom that China’s economy would eclipse the U.S. in a decade—maybe even sooner—is looking uncertain. The view that China was the emerging geopolitical power, with developing nations tucked under its wings, is looking similarly shaky. It is now unclear wheth...
In Asia, Where Digital Banks Can Make An Impact
Asia, World

In Asia, Where Digital Banks Can Make An Impact

Digital banks have sprung up across Asia in recent years. In many cases, they are having little impact on the overall banking market. Affluent societies like Singapore, Hong Kong, Japan and Taiwan are not lacking banking options. Even middle-income countries like Malaysia and Thailand have limited financial inclusion needs. Yet in certain countries that are less affluent, and where the financial system is still underdeveloped, digital banks can play an important role in boosting financial inclusion. This is the case in several Southeast Asian and South Asian countries. The Biggest Southeast Asian MarketIn a population of more than 275 million, Indonesia is estimated to have well over 100 million people who are unbanked or underbanked. Further, the unique island geography of the coun...
China Will Lead Global Economic Recovery, According to a Senior Communist Official
China, World

China Will Lead Global Economic Recovery, According to a Senior Communist Official

Brushing off domestic economic headwinds, a top Communist Party official said Thursday that China aims to drive the world’s recovery this year by pushing forward reforms and making tech innovation a new point of growth. The remarks from Zhao Leji, who chairs the Standing Committee of the National People's Congress, come as foreign investment in the country is falling and it grapples with issues that include high youth unemployment, ballooning debt and a crisis in the property market. Speaking to businesspeople and other leaders at the Boao Forum for Asia, Zhao said China welcomes "all countries to board the express train of China's development." Zhao said tech innovation, particularly through green technologies, would be a key point of economic growth. He also said that China ...
China’s economy is undergoing a great transition rather than a great decline.
Asia, World

China’s economy is undergoing a great transition rather than a great decline.

China's near-term challenges and long-term uncertainties are plentiful, but the widespread pessimism towards the Chinese economy and markets feels excessive. We think the country's in a necessary transition rather than in any long-term decline. Understanding the challenges and timescale is key for investors China's economy has reached an important crossroadsChina's economy has reached an important crossroads after undergoing one of the most impressive growth miracles of modern history. In rapidly moving financial markets, participants are understandably focused on short-term trends and developments. But it's crucial to sometimes take a step back and look at a longer time horizon when it comes to formulating a big-picture strategy, not least in terms of asset allocation. The short-te...
Asia, World

Is Pakistan in Danger? The condition of the country’s economy, democracy, and ties to the US

In this episode of Need to Know, we focus on Pakistan's political and economic situation, as well as its relationship with the United States. Michael Kugelman, Deputy Director of the Wilson Center's IndoPacific program, covers topics such as the health of democracy in the wake of the recent election, the country's ongoing economic crisis, and the value of US support for democracy and human rights. Kugelman highlights the challenges and complexities facing Pakistan and provides insights into the current state of affairs. Pakistan's democracy is facing challenges, with increasing crackdowns on the opposition and concerns about electoral irregularities.The country is dealing with a severe economic crisis and is seeking a loan from the IMF to stabilize its economy.US support for democracy ...
Pakistan wants an extended IMF bailout to repair its damaged economy.
Asia, World

Pakistan wants an extended IMF bailout to repair its damaged economy.

Prime Minister Shehbaz Sharif's coalition government has its work cut out as economic turmoil forces it to tackle deep-rooted structural problems. Pakistan has long been in a state of grave economic turmoil. Political instability, corruption, mismanagement, the COVID-19 pandemic, a global energy crisis and climate change-induced natural disasters have all taken a heavy toll on the economy. Prime Minister Shehbaz Sharif's newly-formed government is currently seeking another bailout from the International Monetary Fund (IMF) to tackle the country's acute balance-of-payments crisis. "We couldn't survive without yet another IMF program," Sharif told a meeting in the Pakistani capital, Islamabad, last week that was broadcast live. His comments came a day after the IMF agreed a p...
The Growth of Banks in Indonesia
Asia, World

The Growth of Banks in Indonesia

The sector has made a roaring recovery since the doldrums of the Asian Financial Crisis of the late 1990s. In the late 1990s, during the Asian Financial Crisis, the Indonesian banking sector essentially collapsed. The crash of the rupiah pulled back the curtain and revealed that the balance sheets of many banks were stuffed with bad loans. Many of them went under, or had to be rescued and recapitalized by the government. Four such failing state-owned banks were merged into a new entity in 1998, which was re-named Bank Mandiri. Today, Bank Mandiri is the largest bank in Indonesia with $138 billion in assets and net income in 2023 of around $3.9 billion. Indonesia’s banking sector is dominated by state-owned banks and has rebounded pretty well from the doldrums of the Asian Financial ...