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A shared economic future for China and ASEAN

The 18th China-ASEAN Expo and the China-ASEAN Business and Investment Summit concluded Monday in Nanning, the capital of south China’s Guangxi Zhuang Autonomous Region. A total of 179 business deals worth a record-high combined value of over 300 billion yuan (about $46.59 billion) were signed during the expo. The value of deals marked an increase of 13.7% over the previous year. In total, 148 economic and trade promotion activities and 26 high-level forums took place during this year’s expo, covering industrial chains, industrial capacity cooperation, customs and health. With an ...

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German economy to grow 2.1% in 2021, 4.9% in 2022

The German economy will grow slower than expected this year as supply chain problems and shortages of raw materials keep a lid on the industrial recovery, but it should rebound strongly next year, the DIW economic institute said on Thursday. The DIW trimmed its growth forecast for this year to 2.1% from a previous 3.2%, but predicted a jump of 4.9% in 2022 assuming production constraints lift towards the end of the year. It sees growth normalising at 1.5% in 2023. Source: Reuters (Reporting by Emma Thomasson; Editing by Riham ...

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Global economy projected to show fastest growth in 50 years

In its new report released on Wednesday, the agency said that the rebound was highly uneven along regional, sectoral and income lines, however. During 2022, UNCTAD expects global growth to slow to 3.6 per cent, leaving world income levels trailing some 3.7 per cent below the pre-pandemic trend line. The report also warns that growth deceleration could be bigger than expected, if policymakers lose their nerve or answer what it regards as misguided calls for a return to deregulation and austerity. Differences in growth The report says that, while the ...

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Japan firms see economy recovering to pre-COVID level in FY2022

A majority of Japanese firms say the world’s third-largest economy will recover to pre-pandemic levels in fiscal 2022, a Reuters poll showed, with many anticipating they will continue to face COVID pains until next year or later. The Corporate Survey results underscored a cautious view of Japan Inc on the economy, which stood in contrast with the government’s optimistic estimate that gross domestic product (GDP) will return to pre-COVID levels later this year. Revised government data last week showed Japan’s economy grew 1.9% in April-June, backed by solid capital spending, ...

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UNCTAD Trade and Development Report 2021: from recovery to resilience: hanging together or swinging separately?

UNCTAD’s Trade and Development Report 2021, released today, says this year will see the global economy bounce back thanks to the continuation of radical policy interventions begun in 2020 and a successful (if still incomplete) vaccine roll-out in advanced economies. Global growth will hit 5.3%, its fastest rate in nearly five decades (Table 1). The recovery, however, is uneven across geographical, income and sectoral lines. Within advanced economies, the rentier class has experienced an explosion in wealth, while low-earners struggle. Constraints on fiscal space (Figure 1), lack of monetary autonomy ...

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With or without you – ‘ExChina’ in vogue?

If China becomes too difficult to price in wider investment indices due to Beijing’s unfolding regulatory crackdown on some of the country’s leading companies, the emerging markets universe may see some seismic shifts. That’s not to say there’s any rush to exit China so far – more a rethink of what, if any, investment bucket the country now falls into in the light of rapidly redefined risks. Many investors remain positive on China despite the uncertainties surrounding the regulatory squeeze on its Big Tech firms, “common prosperity” drive and intensifying ...

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G20 GDP growth slows to 0.4% in the second quarter of 2021, but large differences exist across countries

Gross domestic product (GDP) of the G20 area grew by 0.4% in the second quarter of 2021, down from 0.9% in the first quarter of 2021. However, this figure conceals large differences in the growth observed across countries. Among the G20 economies, GDP growth slowed in Turkey (to 0.9%, from 2.2%), Korea (to 0.8%, from 1.7%) and Australia (to 0.7%, from 1.9%). GDP contracted sharply in India (by (minus) 10.2%, after 2.3% growth). GDP also contracted, to a lesser extent, in Canada (by (minus) 0.3%, after 1.4% growth) and Brazil ...

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Australia’s new US-UK security pact risks China trade

Australia’s new security pact with the United States and the UK, seen as a move to contain China, may worsen strained ties with its biggest export customer, but China’s insatiable appetite for resources may limit its punitive responses, say analysts. The security pact with the Western powers, including access to U.S. nuclear submarine technology, will be seen by Beijing, which is embroiled in a long-running trade spat with Canberra, as a threat, said Michael Sullivan, International Relations Lecturer at Flinders University. “China will view the decision to expand defence cooperation ...

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Goldman Sachs sees India joining major global bond indexes from end-2022

India could be included in two major global bond indexes from the end of 2022, bringing one-off flows of $35-40 billion, Goldman Sachs said on Thursday. India’s inclusion in the JPMorgan GBI-EM Global Diversified Index was more likely by the end of 2022 or early 2023, the bank said in a research note. Inclusion in the Bloomberg Global Aggregate indices would likely happen at the end of 2022 or even end of 2023, the bank said. Goldman Sachs estimated passive inflows of around $35-40 billion if India joined both indexes. ...

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Online purchases boost U.S. retail sales; labor market recovering

U.S. retail sales unexpectedly increased in August as a surge in online and furniture store purchases offset a continued decline at auto dealerships, which could temper expectations for a sharp slowdown in economic growth in the third quarter. The surprise rebound in retail sales reported by the Commerce Department on Thursday came as economists have been downgrading their gross domestic product estimates for the current quarter, citing plunging motor vehicle sales, which are the result of an acute inventory shortage. Sales last month were likely boosted by back-to-school shopping and ...

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China will ‘unswervingly’ support healthy development of private economy – vice premier

China’s vice premier Liu He said on Thursday that China will “unswervingly” support the healthy development of the private economy, as well as exploring ways to alleviate pressure from rapidly rising costs on small firms, according to state media. The government needs to increase policy transparency and predictability for small firms and protect their intellectual property rights to promote equal competition, Liu said in a written statement to a forum in Guangzhou, the official Xinhua News Agency reported. China will make better use of capital markets to help small firms ...

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ECB’s exit from crisis measures will be “very gradual”

Any exit from the European Central Bank’s crisis-fighting measures will be “very gradual” and will ensure that favourable financing conditions are maintained, Finnish central bank chief Olli Rehn said on Thursday. The ECB will debate in December when and how to wind down its 1.85 trillion euro Pandemic Emergency Purchase Programme and whether it needs to ramp up other stimulus measures to pick up the slack. “I’m confident that we will be able to find a viable and meaningful way of ensuring favourable financing conditions when we start our very ...

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Greek jobless rate drops to 15.8% in second quarter

Greece’s jobless rate fell to 15.8% in the second quarter from 17.1% in the first three months of 2021, data by the country’s statistics service ELSTAT showed on Thursday. About 61% of Greece’s 732,544 jobless are long-term unemployed, meaning they have been out of work for at least 12 months, the figures showed. Greece’s highest unemployment rate was recorded in the first quarter of 2014, when joblessness hit 27.8%. The data showed that women and young people in the 15-19 age group were most affected among the jobless. The jobless ...

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Euro zone trade surplus slips in July as imports rise sharply

The euro zone’s trade surplus with the rest of the world declined in July from a year earlier, data released by the European Union’s statistics office showed on Thursday, as imports grew at a faster rate than exports. Eurostat said the euro zone’s unadjusted trade surplus with the rest of the world fell to 20.7 billion euros ($24.4 billion)in July from 26.8 billion euros in July 2020. However, the surplus for the first seven months of 2021 was comfortably higher, at 122.4 billion euros from 112.8 billion euros in Jan-July ...

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Credit Event at China’s Evergrande Could Have Broader Effects

Numerous sectors could be exposed to heightened credit risk if Chinese property developer Evergrande were to default, says Fitch Ratings. We believe a default would reinforce credit polarisation among homebuilders and could result in headwinds for some smaller banks, although we believe the overall impact on the banking sector would be manageable. Fitch downgraded China Evergrande Group to ‘CC’ from ‘CCC+’ on 7 September, indicating that we view a default of some kind as probable. Mounting investor concern about Evergrande’s creditworthiness has already exacerbated credit polarisation among developers, which has ...

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