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What's Happening? - Asia

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Please see below selected recent intelligence about the Asia Pacific region. This is a synthesis of major recent developments at competitors, business schools, thinktanks, media, commentators, and other key influencers in our external environment.

 

Asia-Pacific is a region of huge diversity, not only culturally and geographically, but economically too. Japan is a member of the G7 and a world leader in automotive and technology. Singapore competes with London and New York as a global financial centre. Australia and New Zealand are sometimes treated as a region in their own right due to both geography and culture - it takes over 12 hours to fly from Delhi to Sydney and history ties them more to the UK and US - but they are increasingly connected to Asia through trade.

 

See also:

     

     

     

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    • Please note that, due to the disproportionately high number of stories involving China, we cover these in a separate blog post - please see On China's economic uncertainty.

     

     

     

    June 2016

     

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    • On the global economic radar, Bangladesh has long been overshadowed by its larger neighbour in the region, India. However, with a population exceeding 160 million, Bangladesh has been steadily building its economic strength and is now emerging as an attractive frontier growth market in South Asia. This presents a sizeable opportunity for organisations seeking to expand their global footprint and further establish a presence in the South Asia region. In this article, we explore some of the economic growth drivers for Bangladesh and potential opportunities for global companies to tap into. Read more about Bangladesh's recent economic growth and investment potential in PwC's Growth Markets Centre's latest blog.

     

     

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    • Japan has one of the highest levels of public debt to GDP of any country in the world. In 2015 the ratio stood at 229%, compared with 74% for the US and 19% for China. Since Japan has a shrinking population and almost no economic growth, one wonders how this can ever be paid off. On top of which, the Economist Intelligence Unit expects the ratio to keep rising, to 253% of GDP by the end of the decade.

     

     

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    • The Malaysian economy expanded by 4.2% year-on-year in the March quarter, moderating from a 4.5% growth in the previous period but slightly above market expectations of a 4.1% expansion. It is the weakest growth since the first quarter of 2013.

     

     

     

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    May 2016

     

     

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    • Indonesia’s economy grew 4.9% in Q1 2016. Overall, government consumption disappointed as it grew 2.9% y/y in Q1, down from 7.3% y/y in Q4 2015. Meanwhile, although household consumption maintained its growth rate of 5%, the three rate cuts by Bank Indonesia since January this year appear to have had little noticeable impact.

     

     

     

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    April 2016

     

     

     

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    • Oxford Economics' report 'Indonesia - Why Indonesia is very unlikely to achieve 7% growth' found that when President Joko Widodo took office in 2014 he targeted growth of 7% by 2017. He promised an infrastructure boom and an improvement in Indonesia’s investment climate to boost domestic growth. However, in 2015, growth fell to its slowest pace in six years. Undoubtedly, global factors have weighed on Indonesian growth, but the domestic policy landscape is equally responsible for the economy’s disappointing performance.

     

     

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    March 2016

     

     

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    • Australia’s economy grew more than expected in the fourth quarter, delivering a boost to the government of Malcolm Turnbull in an election year and defying fears over the impact of China’s slowdown. Gross domestic product grew a seasonally adjusted 0.6 per cent quarter-on-quarter in the three months to the end of December, thanks to a boom in household consumption and higher government spending. On an annual basis GDP grew 3 per cent, back to its long-term trend rate and ahead of economists’ consensus estimate for 2.5 per cent growth.

     

     

     

    • In fact, the Australian economy grew 0.6 % in the final quarter last year, taking growth for 2015 to 3%. Growth was driven by a rise of 0.8% in household final consumption expenditure and a rise of 6.0% in public capital spending. These were partially offset by a 3.3 % fall in private business investment, driven by a 12.3% decline in new engineering construction.

     

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    • The Japanese government is getting paid to borrow money after selling benchmark bonds with a negative yield for the first time (Y2.2tn / $194bn in 10-year paper). The upside-down auction follows three years of monetary easing by the BOJ, which has driven interest rates lower in a bid to spark lending. The auction means investors have paid a fee to lend money for a decade to the government.

     

     

     

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    • According to PwC analysis, Myanmar is one of the remaining frontier markets which is expected to become Asia’s next rising star. Over the past five years, the government has established the necessary fundamental building blocks to tap into the country’s true potential and multiple changes in regulations are already being undertaken to support the economy. Prior to the elections in November 2015, the economy was already projected to grow at a rate of 7 to 8% annually and broad market sentiment is hoping that this can further improve with the National League for Democracy (NLD) winning the elections and about to come to power. Learn more about the country and its key economic reforms on the GMC blog.

     

     

     

    February 2016

     

     

    • A new Economist survey found that almost 30% of respondents indicated their outlook for revenue growth in Asia has declined compared to the view held when heading into the previous year. This represents a marked deterioration from the high-level expectations expressed in past surveys. Yet within this “new normal” of lowered expectations, most respondents still anticipated growth of some kind. Prospects for Asia overall are viewed positively with the economies of India, China, and South-east Asia attracting the greatest proportion of bullish sentiments.

     

     

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    • Australia’s unemployment rate climbed back to 6% in January (seasonally adjusted terms), as the job market shrunk by about 8000. In trend terms however, the unemployment rate fell to 5.8% (5.9% in December 2015) and the number of people in employment grew by 19,800. The ABS labour force estimates continue to show unusual monthly volatility.

     

     

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    • Bank Indonesia (BI) cut its key policy rate by another 25bp at the February policy meeting, taking it down to 7%. The central bank also lowered the primary reserve requirement ratio by 1% point to 6.5%. Low inflation, modest growth and favourable financial market developments gave room for BI to cut rates.

     

     

    • Indonesia’s GDP growth climbed back to 5% in Q4, beating consensus. Investment growth, led by government infrastructure spending, rose to 6.9% y/y, adding 2.3 pt to headline growth. Meanwhile, government consumption grew by 7.3% y/y. GDP growth was 4.8% in 2015, the slowest rate recorded since 2009.

     

     

     

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    • Japan's annual exports in January fell the most since the global financial crisis as demand weakened in China and other major markets. Exports dropped 12.9% Y/Y, with the fourth straight month of declines led by a fall in shipments of steel and oil products. Imports declined 18%, leaving a ¥645.9B ($5.7B) trade deficit.

     

     

    • The Bank of Japan surprised markets by adopting a negative interest rate —meaning that banks will now have to pay for the privilege of depositing funds at the central bank. It is not the first central bank to do this: those in the eurozone, Sweden and Switzerland, among others, have all breached the zero-barrier in the last year or two. After the move, borrowing costs for the Japanese government for 10 years fell to 0.07%.

     

     

     

     

    January 2016

     

     

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    December 2015

     

     

     

     

     

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    • Australia’s GDP growth strengthened in the September quarter, to 0.9% in the quarter and 2.5% over the year, up from 0.3% in the quarter and 2.0% over the year to June. Australia’s long-run average annual GDP growth rate is around 3.1%.

     

     

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    November 2015

     

     

     

     

     

     

    • Thomson Reuters, in association with Merrill Datasite, released the latest SouthEast Asia M&A Regional Report 2015, confirming SouthEast Asia as one of the least active markets in 2015. Activity has failed to live up to expectations and volumes have slumped to their lowest levels in five years, amid tougher macro-economic conditions and a shift in the deal cycle. Record levels of activity seen in 2014 came to a halt in the first nine months of 2015, when activity fell to US$63bn from US$140bn a year earlier. The level of M&A engagement has not decreased, but there was less mega-deals activity. Deal pipelines are strong but participants are waiting for economies and the markets to recover or stabilise before pressing ahead with transactions.

     

     

     

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    • Total private capital expenditure in Australia declined by 9.2% in the September quarter in real (inflation-adjusted) terms, and was down by 20% over the year. This is the largest annual decline recorded in CAPEX since this data series began in 1987.

     

     

    • Business lending in Australia picked up by 1.2% in September - its largest monthly rise in seven years (September 2008). Over the past year, business lending has risen by 6.3%, which bodes well for investment and economic growth in the coming quarters.

     

     

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    • Most businesses in Indonesia remain optimistic of growth prospects within the next five years, despite lingering anxiety amid global and local economic uncertainty, according to PwC's 2015 Asia-Pacific Economic Cooperation (APEC) CEO survey, released on Monday, reported that 25 percent of respondents with business in Indonesia remained “very confident” about their prospects in the next 12 months, while 41 percent were “somewhat confident.” About 44 percent of respondents also still have plans to increase investments in Indonesia over the next year. Indonesia was cited, along with the United States and China, as being an attractive destination for future investment, the survey found.

     

     

    • Indonesia’s GDP came in at near six year lows of 4.7% y/y missing forecasts for 4.8% growth. In line with expectations and as promised by the authorities, government consumption jumped 6.6% y/y in Q3; while its contribution to headline growth rose to 0.5%. According to comments from President Widodo the government spent 70% of the allocated budget as compared to only 35% in H1 2015 and it is likely to go up to 94% by the end of the year.

     

     

    • Nevertheless, while Indonesia's challenges and opportunities have been well documented: poor infrastructure, loads of corruption and complex and unnecessary regulation, alongside a huge population, boom in consumer spending and a rich endowment of natural resources. Sustainable and efficient use of all of Indonesia's various resources would not just be good for business, but also for the livelihoods of its 250 million people. Hopes for business-friendly reform were high when Joko Widodo became president in late 2014, but have largely been dashed as the country continued to become a more difficult place to do business. Happily, argued The Economist Intelligence Unit, there are now signs that this might be starting to turn around.

     

     

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    • The Bank of Japan left its policy unchanged refraining from expanding its QE programme beyond the current ¥80trn a year. This is despite the BoJ once again pushing out the date by which it expects to meet its 2% inflation target. The date is now the second half of fiscal 2016 (Q4 2016 to Q1 2017) rather than the first half.

     

     

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    • Business leaders in the Philippines are confident on the growth prospects in the country despite the overall uncertainty felt by many chief executive officers (CEOs) within Asia Pacific towards the region's investment status. On the sidelines of Asia Pacific Economic Cooperation (APEC) meeting being held in Manila, PricewaterhouseCoopers (PwC) revealed on Monday its fifth annual APEC CEO Survey, which determines the CEOs' level of confidence towards the business growth in the region. In the survey, it was noted that while the confidence among Asia Pacific CEOs is at lowest level since 2012, Filipino business leaders, in general, are not particularly pessimistic about the business prospects in the Philippines.Alexander Cabrera, PwC Philippines Chairman and Senior Partner, said 51 percent of Philippine CEOs are very confident about their revenue prospects over next 12 months.

     

     

     

    October 2015

     

     

    • The slowdown in China, weaker commodity prices and the prospect of tighter external financing conditions are dimming the growth outlook for developing East Asia-Pacific, the World Bank warned, a region that has long been a bright spot in the world economy. It downgraded its 2015, 2016 and 2017 growth projections for developing East Asia-Pacific to 6.5, 6.4 and 6.3% respectively.

     

     

     

     

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    The Australian Financial Review (AFR) released the results of its annual accounting partnership survey. Among its key conclusions, the AFR noted:

     

    • "PwC has proven itself the most productive accounting partnership in the country for the third year running with each partner generating an average of $3.5 million in fees in the year to June 30, 2015. But it is no longer the only big four accountancy firm where partners generate in excess of $3 million revenue each.
    • "For the first time, KPMG has also broken that barrier with each of its 402 partners generating an average of $3 million in fees during the 2014-15 fiscal year. PwC's 492 partners earned a total of $1.7 billion in fees in the year to June 30, eclipsing its nearest rival, KPMG, by more than half a billion dollars."
    • "The nature of private partnerships make them incredibly opaque, however, industry sources say PwC had its most profitable year on record in 2014-15. It has thinned its senior management ranks and focused some leaders back into market facing roles. An extreme focus on cost control does not always equate to a palatable organisational culture. But it is the mandate Luke Sayers was elected on when he became chief executive of the Australian practice 3 years ago."
    • "Gary Wingrove also upped the ante on KPMG's high performance culture when he took the chief executive reins in 2013, tweaking the remuneration model by lowering base salaries and increasing stretch targets. The results speaks for themselves. KPMG's 402 partners earned an average of $3 million each and $1.2 billion collectively."
    • "EY's 461 partners earned an average of $2.8 million each and aggregate billings of $1.3 billion. EY profits are said to have rebounded after suffering during its regional integration a few years ago. The regional integration is widely regarded as a strategically brilliant move that saw the Australian practice integrate more closely with fast-growing Asian markets.
    • "While ranked second on the basis of annual income, Deloitte ranked eighth in terms of revenue per partner due to its much larger partnership. Deloitte uses a different definition of partner to most accounting firms which inflates its partner group to 632, a significant jump on its closest rival PwC (492 partners). Deloitte's revenue of $1.3 billion averaged out to $2.1 per partner, behind much smaller rivals including insolvency specialists KordaMentha, PPB Advisory and McGrathNicol."

      "Crowe Horwath had the fastest growth in revenue per partner of any surveyed firm, up 17% to $2.2 million for each of the firm's 221 partners. This was not altogether a glowing result, given it is in large part due to a steady exodus of senior staff as the group's performance floundered, culminating in a takeover by KKR-backed financial services firm Findex. At the other end of the spectrum, revenue per partner at McGrathNicol fell by 16%, to $2.3 million for each of the firm's 29 partners."

    • Full article here.

     

    • The World Economic Forum’s Global Competitiveness Report revealed that Australia’s global competiveness improved slightly over the past year following four years’ of deterioration. Australia’s ranking of 21st most competitive economy in 2015-16 sits with countries such as Malaysia (18th), Belgium (19th), France (22nd) and Austria (23rd). Countries with similar economic profiles to Australia scored better, with Canada at 13th (up from 15th in 2014-15) and New Zealand at 16th (up from 17th in 2014-15).

     

     

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    • The China-Britain Business Council (CBBC) announced the creation of a new Advisory Council made up of some of Britain’s leading business people with China connections, including PwC UK Chairman and Senior Partner Ian Powell. The new initiative has been set up to assist CBBC members in both the UK and China and drive forward collective China business efforts. The Advisory Council will raise awareness of the business opportunities in China and third markets across a wide range of sectors, encourage more UK companies to engage with China, and boost trade and investment between the two countries.

     

     

     

     

    • The People's Bank of China cut the one-year deposit and lending rates again by 25bp to 1.5% and 4.35% respectively, and removed the ceiling for deposit rates. It also lowered the reserve requirement ratio (RRR) for large banks by 50bp to 17.5%. Furthermore, the PBoC reduced the RRR of banks that primarily lend to the agricultural sector and SMEs by an additional 50bp. This is only the second time since the height of the global financial crisis that the PBoC has acted on both interest rates and the main RRR at the same time (the other time was in August). Furthermore, earlier this week it had already injected RMB105.5bn into the banking system.

     

     

     

     

    • Could we be about to witness the great fall of China or will the country continue to power the global economy? China delivered one of the highest growth rates of any global economy over the last decade. However, its recent real estate slowdown and resulting stock market turmoil reignited fears of another global financial crisis. Explore PwC's selected insights in Spotlight on China to find out more.

     

     

     

    September 2015

     

     

    ASIA-PACIFIC

     

     

    • The Asian Development Bank cut its growth forecast for the region's developing economies, citing a softer outlook for China and India and a delayed recovery in the world's advanced industrialised nations. Regional growth is forecast to slow from 6.2% in 2014 to 5.8% in 2015, with a slight rebound to 6.0% in 2016. For the five large economies in the Association of Southeast Asian Nations the growth forecast for this year is lowered to 4.8% - a slight uptick from 2014 - before accelerating to 5.3% next year.

     

     

    • ASEAN is to implement an ASEAN economic community (AEC) by end-2015. Oxford Economics assessed whether it is a new opportunity or a folly and concluded it is more of the latter. Oxford Economics found that ASEAN has learnt from the EU’s mistakes but the AEC will not provide much of the promised economic boost in the short term. There will be longer term benefits - eventually - but no sudden gain.

     

     

    • East Asia will grow more moderately in the near term. Growth faltered in all economies in the subregion in the first half of 2015. Weaker than expected outcomes in the PRC and indications of softness in 2016 prompt downward revisions to growth projections for the subregion’s largest economy. Growth in the PRC is expected to drop to 6.8% from 7.3% in 2014, but support from strengthening external demand plus accommodative monetary and fiscal policies should contain further growth moderation to 6.7% in 2016. East Asia is expected to expand at 6.0% in both 2015 and 2016, a considerable slowdown from 6.5% in 2014. Inflation will remain moderate and below the ADO 2015 forecast. It is forecast to fall to 1.4% in 2015 and rise to 2.1% in 2016, mainly tracking the expected trend in global commodity prices. Although Mongolia now has inflation slowing to below double digits - to 7.6% in both 2015 and 2016 - it remains the outlier in a subregion otherwise marked by low inflation.

     

     

    • Southeast Asia’s projected growth recovery is delayed to next year. Subdued economic growth in the major industrial economies and the PRC weakened export demand. Thailand has yet to bounce back from its 2014 slump, while infrastructure investment has fallen behind schedule in Indonesia and the Philippines. Drought in several countries, and floods in Myanmar, have hurt agriculture. Vietnam, by contrast, is growing faster than anticipated earlier this year, powered by foreign direct investment and buoyant private consumption. Subregional growth is forecast to be 4.4% in 2015 - the same pace as in 2014 but below the 4.9% forecast in ADO 2015. Expected improvements in exports and infrastructure investment are seen lifting growth to 4.9% in 2016. Inflation in most economies is milder than projected in March. However, inflation that was higher than anticipated in Indonesia, the biggest economy in Southeast Asia, keeps the subregional inflation projection at 3.0% for 2015 and lifts it to 3.3% for 2016.

     

     

     

     

     

     

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    • EIU raised its real GDP growth forecast to 6.9% in 2015, from 6.8% previously, following the release of better than expected second-quarter economic growth figures. The sharp drop in global oil prices in late 2014 will feed into weaker consumer price inflation in 2015, when it is expected to average 1.6%, compared with 2.1% in 2014. Producer prices will fall for a fourth successive year in 2015, declining by a worrying 3.9%. 

     

     

     

     

     

     

     

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    • However, Standard & Poor’s cut its credit rating for Japan by a notch. It blamed the government’s economic policies for its decision, saying that although the reforms of the government under Shinzo Abe, the prime minister, had shown “initial promise”, Abenomics has not tackled “a very weak fiscal position…ageing population and persistent deflation”.

     

     

     

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    • Doing business in Taiwan is a concise new PwC guide to the key aspects of undertaking business in Taiwan. It is a useful reference for foreign companies and investors planning to set up or expand their presence in Taiwan, which is one of the most competitive places in the Asia-Pacific region for business, as well as an important trade and investment gateway to emerging Asian markets and China in particular. The latest edition, published in September 2015, provides a concise, up-to-date picture of Taiwan’s business regulatory and tax environment.

     

     

     

    August 2015

     

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    • Fears deepened about whether the Chinese economy was heading for a “hard landing”. Many share indices swung wildly. The main Shanghai index plunged by more than 8% in a single day, its biggest loss since early 2007, wiping out the gains it had made since the start of the year. The S&P 500, FTSE 100 and other markets in Europe and Asia were also rattled, with some recording their steepest falls since the financial crisis in 2008. One source of worry for investors was data showing that Chinese manufacturing in August had shrunk the most for more than six years. The latest assessment of the smartphone market from IDC, a research firm, predicted that shipments in China will increase by just 1.2% this year, down from 19.7% in 2014.

     

     

    • China's official manufacturing purchasing managers’ index edged lower to 50.0 in July from 50.2 in June. A reading of 50 is right at the cut-off point between expansion and contraction compared with the previous month. Sub-indexes showed weakness across a broad front, including output as well as new orders and new export orders along with employment and prices for materials. China's economy grew at a better-than-expected 7% in the second quarter from a year earlier in line with the government's target of about 7% growth for the full year. But the second quarter figure was still the slowest pace in six years.

     

     

     

     

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    • Indonesia’s GDP grew by 4.7% year on year in Q2 - unchanged from the previous quarter. Capex investment rose 3.6% y/y, the lowest annual rate since Q4 2013, as business sentiment was impacted by an uncertain global environment and ongoing delays in executing domestic reforms. Government expenditure growth eased to 2.3% y/y, while private spending softened.

     

     

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    • Malaysia’s GDP growth eased to 4.9% year on year in Q2 from 5.6% in Q1 (the slowest annual rate since 2013). However, given weaker external demand, the outcome was solid. On a quarterly basis GDP growth only slowed marginally to 1.1% q/q from 1.2%.

     

     

     

     

    July 2015

     

     

     

     

     

     

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    • Real GDP expanded by 7% year on year in April–June, unchanged from the first quarter of the year, suggesting that policy easing has proved more effective in stabilising economic activity than suggested by high-frequency data. Tertiary industries, especially the financial sector, drove the growth in the second quarter as financial activities boomed for much of April–June on the back of rising domestic stockmarkets.

     

     

     

     

     

     

     

     

    • The Chinese government staged, for the Economist Intelligence Unit, an extraordinary intervention to try to stem the popping of what was a very clear stockmarket bubble. The benchmark Shanghai A-share index is down by around 30% since its peak on June 12th. The important impact here will not be seen immediately. Indeed, the impact on the real economy in the short term is likely to be slight. But for the EIU there are two big reasons to become a bit more pessimistic longer-term. The first is that the Chinese leadership have firmly stamped their names on the intervention. It looks to be their first major mis-step, and could be the precursor to some internal wrangling. The second is what the intervention says about the likelihood of medium-term economic reform. Certainly it does not seem to reflect policymakers committed to giving markets a 'decisive' role, as promised in 2013 by the Chinese Communist Party government.

     

     

    • In 'Greek crisis is nothing compared to China', CNN Money warned that instead of focusing on Athens, investors should be much more worried about what's going on in China. The Shanghai Composite and Shenzhen Composite have both plunged about 30% from their highs due to legitimate concerns that Chinese stocks are in a bubble. China's government is taking steps to try and minimise any more pain in the market. However, as one tweeter put it, "China has lost 15 Greeces in market cap in three weeks".

     

     

     

     

    • Accenture increased its strength in Asia Pacific with the acquisition of PacificLink Group, an independent set of full service digital agencies in Hong Kong. The acquisition significantly expands the ability of Accenture Interactive, part of Accenture Digital, to bring its unique blend of digital design, marketing, content and commerce services to clients in the rapidly expanding Greater China market. PacificLink employs approximately 240 professionals in Hong Kong and includes a number of multi-award winning agencies that specialise in creating and delivering an integrated and connected set of differentiated marketing solutions for brands across a full spectrum of online and offline platforms. The move strengthens Accenture Interactive’s ability to help CMOs and CIOs bridge the gap between marketing and digital technologies.

     

     

     

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    • South Korea's economy recorded its weakest expansion in six years in Q2, recording 0.3% growth from the previous quarter. The outbreak of the MERS virus in late May notably dampened consumer demand and tourist arrivals fell by 41.3% y/y in June. Farm output also fell sharply, albeit temporarily due to a drought.

     

     

     

     

     

    June 2015

     

     

     

     

     

     

    • According to BankofAmericaMerrilLynch, for Asia Pacific’s most influential CFOs, 2015 will be a year of growth but will require a heightened level of courage, commitment and care to deliver on expectations. Change will be inevitable. Challenges will be multi-faceted. Risk and market volatility will remain a reality. But with an actively managed finance strategy and a clear understanding of the diverse headwinds, opportunities will materialise. These are some of the projections of Asia Pacific’s leading CFOs.

     

     

     

     

     

     

     

     

     

     

    • China aimed to pledge a multi-billion dollar investment in Europe’s new infrastructure fund at a summit in late June in Brussels, Reuters reported. The exact sum has yet to be decided. In return for the investment in Europe, China is expected to ask Europe to invest in its revival of the Silk Road. The “One Belt, One Road” initiative is expected to build energy and communications links such as railways, highways, oil and gas pipelines, power grids, Internet networks, maritime and other infrastructure links across Central, West and South Asia to as far as Greece.

     

     

    • The Economist Intelligence Unit now expects the Chinese economy to grow by 6.8% in 2015, as rising incomes support household spending growth but as slowing growth in investment - especially in property- holds back the pace of expansion. falling global oil prices and excess local industrial capacity will cause average consumer price inflation to slow to 1.2% in 2015, from 2.1% in 2014. The renminbi is expected to weaken against the US dollar in 2015, depreciating on an annual average basis for the first time since 1994.

     

     

     

     

    • Deloitte appointed its first Asia Pacific leader to come from Japan. Yoichiro Ogawa, who has a 30-year career with Deloitte Japan, will serve a four-year term. In his role, Ogawa will be responsible for driving market leadership and quality across the region, strengthening the firm's brand and client services and identifying further growth opportunities while working with member firm leaders to enhance bonds and collaboration. In addition to the Asia Pacific regional leadership role, Ogawa will also become the Deloitte global managing director of regions and will serve as a member of the network's executive and operating committees. Ogawa's appointment is part of the new leadership team set up by Punit Renjen, Deloitte's global chief executive as of 1 June 2015.

     

     

     

    May 2015

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    • Forum for the Future outlined seven trends that could make or break a sustainable future for Southeast Asia. It’s one of the fastest growing economic regions in the world, but rapid growth and the rising aspirations of a growing middle class is increasing pressure on natural resources. The area has lost 13% of its forests since 1992 - an area equivalent to the size of Vietnam, the UN Environmental Programme reported. The impacts of global deforestation on the climate will be felt close to home: the region is one of the world’s most vulnerable to climate change impacts, such as droughts, floods, typhoons, sea level rise and heat waves.

     

     

     

     

    • China is planning to invest up to $50bn (£32bn) in Brazil for new infrastructure projects. The deal was due to be signed by banks from both countries during a visit by Chinese Prime Minister Li Keqiang to Brazil. The money will go towards building a railway link from Brazil's Atlantic coast to the Pacific coast of Peru to reduce the cost of exports to China. The fund will also finance a joint venture to produce steel. Brazil currently exports much of its iron ore to China.

     

     

     

     

     

     

     

     

     

     

     

     

     

    April 2015

     

     

     

     

    • The EIU forecast that Chinese economic growth will slow to 7% in 2015, but lower inflation will provide support to real household consumption. ThePeople’s Bank of China may cut interest rates again in the second quarter of 2015, in order to offset the effects of slowing inflation, but monetary policy will remain fairly tight. Owing partly to lower global oil prices and also to excess supply in the economy, the EIU expects annual consumer price inflation to an average of 1.2% in 2015.

     

     

     

     

     

    • Official data revealed that Chinese exports fell 15% in March compared with the same month last year. This means export growth over the first quarter of the year, which saw double digit growth in January and February, slowed to 4.7% compared with Q1 2014, and 8.7% compared with Q4 2014. Imports also fell over the month, down 12.3%, while the nation’s trade surplus stood at $3.1bn, considerably below expectations. Bloomberg chief Asia economist Tom Orlik said that China’s government will look to cut interest rates to ease domestic conditions as a response.

     

     

     

     

    • Inflation in South Korea fell to a 16 year low of 0.4% in February, while the country reported its largest ever trade surplus last month of $US8.4 billion as imports and exports fell.

     

    March 2015

     

     

     

    • Australia’s GDP increased by 0.5% q/q and 2.5% p.a. in Q4 2014, below the long-term average growth rate of around 3.25% p.a. (inflation adjusted and seasonally adjusted), but not much lower than the average GDP growth rate since 2010 (2.7% p.a.).

     

     

     

    • China's state owned banks are about to begin the painful process of writing off billions of dollars in bad debts, as Beijing seeks to avoid Japanese-style stagnation from a failure to address problem loans. Accounting firms in China are preparing for a spike in bad loans this year and fear it may further destabilise China's already-slowing economy.

     

     

     

    February 2015

     

     

     

     

    • The China affiliates of the Big Four agreed to pay a combined US$2 million as part of a settlement with the US SEC over their failure to produce documents from audits of Chinese companies. But the SEC stopped short of suspending the firms from auditing Chinese companies listed in the US. An administrative law judge called for a six month suspension from such work. In a joint statement, the four Chinese firms said they were “pleased” to have reached the settlement and added that their “ability to continue to serve all their respective clients is not affected by this settlement.”

     

     

     

    January 2015

     

     

     

     

     

     

    Timelines