Asian Economy: Overview, Growth & Development

China’s structural overhaul to usher in era of solid economic growth

The US economy slowed sharply in the third quarter, growing at an annualized rate of 2 percent, lower than China’s 4.9 percent growth for the corresponding period. For the whole year, the gap between the world’s two largest economies is expected to be further narrowed, as China’s yearly growth rate will likely reach 8 percent, doubling the speed of the US’ GDP growth. As always, policy makers in Beijing will continue to focus on developing the “dual engines” of consumption and investment to drive domestic demand, in addition to vigorously expanding its exports. Barring any unexpected mishaps or natural catastrophes, China is well positioned to achieve around 5 percent annual growth in the coming years. And, as a rising economic powerhouse, China will continue to provide abundant and lucrative opportunities for the world’s other economies that are willing to actively engage with the “Middle Kingdom”.

India targets net-zero carbon emissions by 2070

India’s economy will become carbon neutral by the year 2070, the country’s prime minster has announced at the COP26 climate crisis summit in Glasgow. The target date is two decades beyond what scientists say is needed to avert catastrophic climate impacts. India is the last of the world’s major carbon polluters to announce a net-zero target, with China saying it would reach that goal in 2060, and the United States and the European Union aiming for 2050. “By 2070, India will achieve the target of net-zero emissions,” Narendra Modi told more than 120 leaders at the critical talks on Monday. Modi also said India would increase its 2030 target for installed capacity of “non-fossil energy” – mostly solar – from 450 to 500 gigawatts. In addition, 50 percent of the country’s energy requirements will come from renewable sources by the same date.

Indonesia sees q3 GDP growth at 4.5pc y/y

Indonesia expects rising exports and a recovery in household consumption to result in economic growth of 4.5 percent in the third quarter, refining an earlier forecast for 4-5 percent growth, but headwinds lie ahead, its finance minister warned on Monday. Southeast Asia’s largest economy grew 7.07 percent in the second quarter, but a new wave of COVID-19 infections in July, triggered by the spread of the Delta variant, and measures to control the outbreak have hurt its economic recovery. Third quarter data is due to be released on Nov.5. Referring to the new third quarter forecast as an upward revision, Finance Minister Sri Mulyani Indrawati said indicators for domestic demand had improved since the second week of August, when anti-virus measures began to be relaxed. Exports from Indonesia, the world’s biggest exporter of thermal coal and palm oil, have also surged amid record high prices. “This shows Indonesia’s economy is quite bullish,” Sri Mulyani said in an online news conference, adding that the economic impact of the virus resurgence was seen as “not too deep”. The minister also gave a new official forecast for 2021 full-year growth of 4 percent, compared with a previous forecast of 3.7percent to 4.5 percent.

How Japan’s new PM is promising a ‘new capitalism’

Japan’s new prime minister, Fumio Kishida, has sold his plan to redistribute wealth in the country as the “new capitalism”. But some critics on social media suggest the plan sounds more like socialism to them – even dubbing it Japan’s “common prosperity”, referring to a key policy from the Chinese Communist Party. “Does he even understand how capitalism works?” tweeted Hiroshi Mikitani, the chief executive of Rakuten – Japan’s huge online retailer and answer to retail giant Amazon. Mr Mikitani was particularly angry about the prime minister’s proposal to raise capital gains tax (CGT); the government’s levy on profits made from investments, calling it “double taxation”. The Rakuten boss wasn’t alone in expressing his dislike for the controversial new proposal, many feared it could swiftly kill-off a recent wave of fresh interest in the stock market from small, retail investors.

Vietnam, UK enhance cooperation in digital economy, digital transformation

Vietnamese Minister of Information and Communications Nguyen Manh Hung and the UK’s Parliamentary Under Secretary of State at the Department for Digital, Culture, Media and Sport Chris Philp signed a Letter of Intent on cooperation in digital economy and digital transformation on November 1 (London time). The two officials shared strategic orientations, national programmes and projects on the development of the digital economy and digital society of each country, as well as initiatives and policies in support of digital economic development. They also exchanged opinions on possibilities to expand cooperation and strengthen coordination between management agencies on digital transformation, digital economy, digital business connection, and discussed measures to jointly develop and organise the implementation of initiatives within the framework of the UK-ASEAN Digital Innovation Partnership and the Asia-Pacific Digital Trade Network.

Malaysia stocks fall 2pc

Malaysia stocks fell on Monday as the government announced a one-off “windfall” tax on companies to raise revenue for the coming year. The benchmark FTSE Bursa Malaysia KLCI index fell around 2.2 percent and was among the worst-performing stock markets across Asia-Pacific. Malaysian Finance Minister Tengku Zafrul Aziz on Friday presented the government’s budget for 2022, which includes the largest-ever spending plan worth over 332 billion ringgit ($80 billion) to jump start an economy weighed down by the Covid-19 pandemic. Zafrul announced several measures to raise government revenue, including increasing the tax rate on corporate income of more than 100 million ringgit to 33 percent from 24 percent in 2022.

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