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Japan confident of ending deflation, talks down corporate tax cut

August 19, 2013

TOKYO - In its monthly economic report for August, Japan’s Cabinet has expressed confidence that the economy no longer facing chronic price declines. CPI inflation turned positive in June for the first time in a year, rising to 0.2% y/y.  Despite a slightly weaker-than-expected Q2 GDP outturn (2.6% saar), the Cabinet judged that the economy is, “picking up steadily and shows some movements on the way to recovery”, evidenced by rising exports, private consumption and industrial production. The Cabinet also expressed confidence that improving corporate earnings will help boost business investment, which contracted in Q2.

India intensifies measures to stem capital outflows, stabilise the rupee

August 19, 2013

NEW DELHI - The Reserve Bank of India has introduced new measures to stem capital outflows, including tighter restrictions on overseas direct investments (to 100% of companies’ net worth, down from 400% previously), capping outward remittances by individuals to US$75,000 per year from US$200,000 previously, and prohibiting outflows on acquisition of overseas property. The measures come after the Government measures announced just days ago to reduce the current account deficit through hikes in import duties and fuel price reforms, along with measures to boost capital inflows.

Inflation in India jumps on weak currency, rising food prices

August 19, 2013

NEW DELHI - India’s closely-watched wholesale price inflation has jumped in July to a higher-than-expected 5.8% y/y, led by upward energy price adjustments, rising food prices and the impact of a weakening rupee. Reassuringly, core inflation stayed benign at 2.3% y/y (from 2.1% y/y in June). The jump in headline WPI inflation, which reached a five-month high, was influenced by the import pass-through of a near 10% rupee depreciation during May-July, accentuated by a hike in regulated diesel prices (3% m/m) and a surge in prices of fruit and vegetables (10.5% m/m) amid temporary supply distortions from heavy rains.

Global economic outlook dims while US recovery continues: ICC-Ifo survey

August 15, 2013


PARIS  – The world economy has weakened slightly this quarter, mainly due to declining optimism in Asia and Latin America, while North America shows signs of continuing recovery, according to the latest World Economic Survey published by the International Chamber of Commerce (ICC) and the Munich-based economic research institute Ifo.

Bohai Bay likely to join Pearl, Yangtze Deltas as China’s third economic engine

August 14, 2013

BEIJING – China’s central government is considering plans to upgrade regional co-operation between the provinces of Beijing, Tianjin and Hebei to build a trilateral economic sphere in the Bohai Bay area. A draft for co-operation was completed in 2006, but eventually shelved. Since President Xi Jinping urged the three cities to push forward with co-operation in May, local governments have submitted proposals to restart the initiative.

E-commerce industry surges in China in first half

August 14, 2013

BEIJING – China’s e-commerce sector raked in revenue of RMB4.98 trillion in the first half, up 45.3% on-year, according to data from the Ministry of Industry and Information Technology (MIIT). Consumption of information products and services jumped 20.7% on-year to RMB2.07 trillion and the output of smartphones surged 120% to 214 million units, paralleling a rise in mobile e-commerce.

China to expand urban rail network in stimulus programme

August 14, 2013

BEIJING - A National Development and Reform Commission (NDRC) official has said China will expand city rail networks to 3,000 km by 2015 and to 6,000 km by 2020, with combined investment of RMB 3-4 trillion. Local bureaus in more than 10 cities have granted approvals to build or extend local urban rail networks in recent months, and 36 cities have approved plans to build subways. In 2013 alone, investment in China’s rail network will expand by RMB40 billion from last year to RMB220 billion.

Taiwan stimulus to lift spending on construction projects

August 13, 2013

TAIPEI - The Taiwanese Government will increase its spending on public construction projects by 10% in 2014 to help stimulate economic growth, according to a budget plan unveiled on Monday. In 2014, Government expenditure will reach NT$1.9407 trillion, up NT$33.1 billion, or 1.7%, from this year. Revenue, meanwhile, is projected to decrease marginally by NT$2.5 billion, or 0.1%, to NT$1.7308 trillion. The NT$209.9 billion shortfall, along with NT$64 billion for principal repayment on debt, will be covered by new borrowing and the issuance of Government bonds (ATI).

Singapore lifts growth expectations, India sees trade deficit narrow

August 13, 2013

SINGAPORE – The Ministry of Trade and Industry has revised its 2013 full-year GDP growth forecast to 2½%-3½% from 1%-3% previously on expectations of improving external demand, following a surprise lift in GDP of 3.8% y/y for the second quarter, up from a preliminary reading of 3.7%. The better-than-expected outturn was due to an upward revision in services output.

Japan Q2 GDP weakens on slower investment spending

August 13, 2013

TOKYO - A weaker-than-expected GDP outturn for the second quarter has dented surging hopes of a quick recovery in Japan, and raised new questions about whether the Government will allow a planned consumption tax hike to go ahead as scheduled in 2014. Q2 GDP rose at an annualised rate of 2.6% s.a. (consensus: 3.8%), and the Q1 outturn was revised down to 3.8% (from a previous estimate of 4.1%). The outturn was influenced by a further contraction in capital spending.

China steps up third attempt to strengthen private enterprise sector

August 12, 2013

SINGAPORE -- China is stepping up its third major attempt to get private enterprise into a wider range of businesses, says ratings agency Standard & Poor's. “Several policy measures introduced this year appear to promote this objective,” S&P says in a new report. “Even as the Government continues to see a leading role for its State-owned entities (SOEs), it's clearly pushing for the private sector to increase in importance.” Says S&P credit analyst, Kim Eng Tan: "If the reformers prove to be 'third-time lucky,' then strong economic growth could continue to be a key sovereign rating support for the foreseeable future."

Samsung leads China smartphone market, Apple drops out of top five

August 12, 2013

BEIJING - Samsung led the Chinese smart phone market in the second quarter of 2013, taking up a share of 17.6%, while Apple saw its share drop to 4.8%. The share of domestic brands increased, with Chinese vendors including Lenovo, Yulong, ZTE and Huawei holding the first five spots while Xiaomi managed to occupy sixth place, overtaking Apple, which dropped to seventh spot.

Japan sentiment could weaken if reforms miss expectations: BBVA

August 10, 2013

HONG KONG – In its quarterly China/Asia Economic Outlook , BBVA Bank says risks to Asia’s broader outlook stem from slowing demand from China and financial volatility from QE tapering – and that in Japan, sentiment could weaken if implementation of structural reforms misses expectations. “Asian growth performance has been mixed,” BBVA says.

Citi China launches electronic RMB cross-border settlements

August 9, 2013

SHANGHAI - Citibank (China) says it is the first international bank to launch a paperless processing solution for RMB cross-border settlements following a series of measures aimed at simplifying the cross-border RMB settlement process announced by the People’s Bank of China (PBOC) on July 10. Citi has connected its  electronic banking solution to the Balance of Payment Declaration (BOP) system operated by China’s State Administration of Foreign Exchange (SAFE).

Strong July activity indicators raise confidence that China growth is stabilising

August 9, 2013

HONG KONG - Following yesterday’s strong export/import figures, today’s release of monthly activity indicators for July provide additional evidence that growth is stabilising, says BBVA Bank.”In particular, industrial production rebounded to 9.7% y/y (consensus: 8.9%), fixed asset investment remained strong (20.1% vs. consensus: 20.0%), and retail sales held up (13.2% vs. consensus: 13.5%),” BBVA says.

Taiwan lifts trade, tourism sanctions on the Philippines

August 8, 2013

TAIPEI - The Taiwanese Government today lifted all 11 sanctions it had levied against the Philippines over the fatal shooting of a Taiwanese fisherman by Philippine coast guard officers in May. Taiwan’s
Foreign Affairs Minister, David Lin, made the announcement after meeting with Amadeo Perez Jr., Chairman of the Manila Economic and Cultural Office and envoy of Philippine President Benigno Aquino III.
The sanctions included a freeze on the hiring of Filipino workers in Taiwan and a travel alert for the Philippines (ATI).