SHANGHAI – Joining the Trans-Pacific Partnership (TPP) would add two percentage points to China’s annual GDP, according to the new chief economist of the People’s Bank of China, Ma Jun.
During an internal presentation in mid-June, Ma Jun predicted that the economic benefits of joining the TPP would be such that China’s GDP would grow by an extra two percentage points per year. Ma also stated that the economies of South Korea and Vietnam would benefit from a boost of more than two percentage points as well. In addition, Ma recommended that China should commence negotiations to join the TPP as soon as possible in order to seize the available economic opportunities.
DELHI – Following an election campaign which was largely absent of foreign policy, Modi has surprised many by spending his first few weeks in office focusing on India’s foreign relations, a decision which is being driven by the need to fix India’s economic problems.
With their landslide victory last month, the Bharatiya Janata Party (BJP) inherited an economy struggling from high inflation, a falling rupee and a drop in both industrial production and foreign investment. The election of Modi, a relative hardliner who has the reputation of being business-friendly and decisive, was a clear message from voters to fix the sputtering Indian economy.
HANOI – Vietnam’s Department of Foreign Investment (DFI) has reported that, in the first five months of this year, the country saw a steep rise in foreign direct investment (FDI) capital from Hong Kong and China.
Thirty-eight countries and territories invested in Vietnam between January and May. Hong Kong contributed US$630 million in newly registered FDI, making them the second largest investor into Vietnam, and accounting for 11.5 percent of total investment into the country. Hong Kong’s FDI was a fourfold increase over its investment during the same period last year.
Chinese Foreign Minister Wang Yi has said that China is prepared to reach a final settlement with India on the issue of border disputes and investment if India is open to increasing bilateral trade and relaxing foreign direct investment regulations.
“Through years of negotiation, we have come to an agreement on the basics of a boundary agreement, and we are prepared to reach a final settlement,” Wang said.
Chinese foreign minister Wang Yi has met with leading Indian officials to discuss ways to improve bilateral relations and strengthen cooperation in key areas including trade and investment.
Wang Yi first met with Sushma Swaraj, the Indian Minister of external affairs, for a meeting which lasted more than three hours on Sunday, marking the first high-level meeting between India and China since Modi assumed office last month. Both Wang and Swaraj were accompanied by delegations made up of senior officials from their respective countries.
During discussions on economic engagement between the two countries, Wang and Swaraj agreed to deepen business and trade relations. They discussed the possibility of investment by Chinese companies in several different industries, as well as the possibility of investment through industrial parks.
HANOI – Following in the footsteps of the Philippines, Vietnam is considering taking China to an international maritime court to resolve a simmering dispute over contested waters in the South China Sea (also known as the East Sea by Vietnam). Vietnamese Prime Minister Nguyen Tan Dung has stated that Vietnam is contemplating a series of measures in response to recent provocative Chinese actions – these include possible legal action, such as filing a case with the Permanent Court of Arbitration at The Hague, located in the Netherlands.
SHANGHAI – China’s entertainment and media market will overtake Japan’s to become the world’s second-largest by the end of 2018, according to a survey published this week.
The Global Entertainment and Media Outlook 2014-18, which was published by global professional services network PricewaterhouseCoopers (PwC) on Tuesday, compares consumer and advertising spending data from 54 countries across 13 sectors, including book publishing, filmed entertainment, internet advertising, music, radio, TV subscriptions and license fees, and video games.
According to the survey, China’s entertainment and media market is forecast to grow from a value of US$127.34 billion in 2013 to US$213.55 billion in 2018. Overall, spending across the 13 sectors is expected to grow at a compound annual growth rate (CAGR) of 10.9 percent until 2018, compared with a global average CAGR across the sectors of 5 percent.Sectors with particularly high CAGRs include internet advertising (17.9 percent), internet access (13.7 percent), filmed entertainment (13 percent), and TV subscriptions and license fees (11.3 percent).
Last week, Russia and China sealed a massive thirty-year natural gas deal to pipe eastern Siberian gas to China, in what will be a strategic economic and diplomatic win for both sides.
Op-Ed Commentary: Mallory LeeWong
After 10 years of negotiations and false starts, Russia and China finally inked a historic natural gas deal on May 21 during the second day of Russian President Vladimir Putin’s visit to Shanghai. Expected to provide Putin with a much-needed diplomatic boost in the face of U.S. and EU sanctions over Ukraine and grant Russia a key foothold in the Asian gas market, the deal will also ensure future Chinese access to clean energy supplies.
According to Alexei Miller, CEO of Russia’s Gazprom, the deal with China National Petroleum Corporation (CNPC) is worth an estimated US$400 billion and will be paid in RMB and rubles instead of U.S. dollars. Beginning in 2018, Gazprom will supply 38 billion cubic meters of gas per year for 30 years from eastern Siberia to China’s industrial northeast via the planned Power of Siberia pipeline. A second pipeline, the Altai pipeline, could also be built to carry gas from Siberia into China’s northwest in the near future.
SINGAPORE – Singapore and Hong Kong have been named the best and third-best places in the world to do business by an Economist Intelligence Unit (EIU) survey.
Singapore and Hong Kong retained their positions in first and third place from a previous EIU study, which covered the period from 2009 to 2013. The other countries which will now be ranked in the top 5 until 2018 are Switzerland (2nd), Canada (4th), and Australia (5th).
The survey measures the attractiveness of the business environment in 82 locations around the world by “examining ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labor market and infrastructure.”
But problems could flash up and some countries have longer term issues.
Op-Ed Commentary: Chris Devonshire-Ellis
With China becoming embroiled in increasing numbers of regional tensions, the operational risks for foreign investors in a number of these countries should be assessed. Recent riots in Vietnam for example, while going completely unreported in China, have hit the headlines in the West, while Hong Kong Shippers’ Council chairman Willy Lin Sun-mo has said that Hong Kong manufacturers based in the Pearl River Delta are running out of alternative, low-cost factory locations elsewhere.
The issue, especially as many foreign manufacturers are looking at nearby low-cost manufacturing locations, is key to businesses faced with rising China labour costs. The Chinese middle class consumer market is expected to increase by 350 million people over the next seven years, and that additional manufacturing capacity to service them is increasingly being placed elsewhere. This is especially true in light of the China-ASEAN Free Trade Agreement, which impacts upon many countries, including Vietnam, reducing customs tariffs on thousands of products to zero.