Analytics


Director of the Center for Russian Studies at the East China Normal University (ECNU) Dr. Feng Shaolei speaks about the EEU and SREB integration conjunction prospects in an interview for the NCC APR

According to Dr. Feng Shaolei, Sino-Russian bilateral cooperation and SREB-EEU “conjunction” are both interrelated and differentiated. For example, recently China has signed the Agreement on Deepening Cooperation on China-Europe Freight Rail Services with seven countries including Russia. This is a cooperation agreement among railway sectors in China, Russia, Belarus, Germany, Kazakhstan, Mongolia and Poland. This agreement will not only serve the “OBOR” Initiative, but also bring great opportunities to the EEU. On the basis of cooperation in previous years, this project will further promote economic development of and trade cooperation among nations along the railway. The signatories will work together to improve the railway infrastructure, establish an information exchange system for transportation safety, expand the scope of railway transportation services, speed up customs clearance and in addition to establishing joint working groups and expert groups to address different issues.

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South Asia Remains World's Fastest Growing Region, but Should Be Vigilant to Fading Tailwinds

Led by robust growth in India, South Asia shows resilience in the face of turbulent international markets and remains the fastest-growing region in the world, with economic growth forecasted to gradually accelerate from 7.1 percent in 2016 to 7.3 percent in 2017, a World Bank report said.
According to the report, the region’s economic performance prospects remain strong due to its limited exposure to global turbulence, coupled with increasing investment activity.
However, there are also signs of fading tailwinds. Capital flows to the region have declined and remittances from oil exporting countries have started to weaken. Fuel and food prices remain low but are unlikely to keep falling. As a result overall output growth is slower than previously anticipated and inflation has recently been creeping up.
Given its weight in the region, India sets the pace for South Asia as a whole. Economic activity is expected to accelerate from 7.5 percent in FY2016 to 7.7 percent in FY2017 based on the expectation of strong private investment, a push in infrastructure spending, an improved investment climate, and deleveraged corporate and financial balance sheets.
The report’s analysis of fiscal policy across the region suggests that governments need to find a balanced path towards fiscal consolidation.
In Bangladesh, growth is stable and projected to rise due to increased government consumption and investment, a recovery in private investments, and an easing of regulatory and infrastructure constraints. The country should be cautious about trade and financial shocks. It should strive to boost private investment by reforming business regulations, mitigating infrastructure deficiencies and addressing financial sector weaknesses.
In India, GDP growth is expected to be 7.7 percent in 2017 compared to 7.5 percent in 2015 supported by a rebound in agriculture and stimulus from civil service pay reforms. However, delays in the adoption and implementation of key reforms could affect investor sentiment. Favorable overall trends mask important underlying divergences: between urban and agricultural households; between domestic and external demand; and between public and private capital expenditure, which should be addressed.
Sri Lanka’s economic growth is expected to grow at 5.3 percent in 2016 and 2017 driven by increased public investment and postponed investments in 2015. The challenging global environment has taken a toll on the economy with reduced exports and remittances; and significant capital outflows, leaving Sri Lanka with higher public debt, lower reserves and rising inflation.
Press-release at the Word Bank official web-site

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East Asia Pacific Growth Remains Resilient in Face of Challenging Global Environment, Says World Bank

Growth in developing East Asia and Pacific has remained resilient and is expected to ease only modestly during 2016-2018, according to a new World Bank report. This outlook is subject to elevated risks and countries should continue to prioritize monetary and fiscal policies that reduce vulnerabilities and strengthen credibility, while deepening structural reforms.
Growth in developing East Asia is expected to ease from 6.5% in 2015 to 6.3% in 2016 and 6.2% in 2017-2018. The forecast reflects China’s gradual shift to slower, more sustainable growth, expected to be 6.7% in 2016 and 6.5% in 2017, compared with 6.9% in 2015.
“Developing East Asia and Pacific continues to contribute strongly to global growth. The region accounted for almost two-fifths of global growth in 2015, more than twice the combined contribution of all other developing regions,” said Victoria Kwakwa, incoming World Bank East Asia and Pacific Regional Vice President. “The region has benefited from careful macroeconomic policies, including efforts to boost domestic revenue in some commodity-exporting countries. But sustaining growth amid challenging global conditions will require continued progress on structural reforms.”

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Trade Raises Living Standards in APEC Region: Report

Living standards have improved across the 21 APEC member economies on the back of trade-driven economic and social development, according to a new report. But further progress in the world’s most populous region will hinge on efforts to compensate for ebbing trade growth.
The APEC Policy Support Unit report points to gains in health, education and economic opportunities in APEC economies over the last quarter century, facilitated by their market integration and lowering of barriers to cross-border movement of people, trade and investment.
The report provides an analysis of the UNDP’s Human Development Index which measures people’s health and lifespans, knowledge levels, and standards of living in economies globally. It reveals improvements in all APEC economies which account for 3 billion people or 40 per cent of the world’s population.
APEC economies attained an average score of 0.80 in the latest Human Development Index, released in 2015, out of a maximum of 1 and minimum of 0. This is up from 0.69 in 1990—the year after they came together to form APEC to boost regional growth and prosperity via greater interconnectivity.
However, the region’s multi-year contraction in trade, undermined by continued uncertainty in the global economy, presents risks to continued progress in improving living standards.
Policies that open up cross-border education and career training; micro, small, and medium enterprise participation in regional supply chains; and women’s entrepreneurship are among the areas of increasing focus in APEC’s agenda to fuel quality growth and human development.
New measures will be taken forward when Trade Ministers from APEC economies convene on 17-18 May in Arequipa, Peru.
Press-release at the official APEC web-site

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Spring 2016 edition of Global Asia explores the security in the Asia-Pacific

The authors of the issue explore China and the US rivalry in the region, Asian Infrastructure Investment Bank (AIIB) role in China’s emergence as a regional leader, traditional security alliances, nuclear security, trust deficits in East Asia, Korean Peninsula problem, as well as ASEAN security agenda. The edition also includes the book reviews on related security topics.
Spring 2016 edition at Global Asia web-site

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New KPMG report explores China`s business environment and investment flows trends

KPMG’s new report - China Outlook 2016 finds that China’s inward and outward investment patterns are reflective of the country’s economic restructuring, and are likely to continue being so in 2016 and beyond, with opportunities increasingly found in those sectors and areas whose development will contribute towards China’s transition into a high value-added economy.
China’s transition from an investment- and export-led growth model to one driven by consumption and innovation has led to the emergence of a two-track economy. The first track, in basic manufacturing and traditional industries, is experiencing significant headwinds, while the second, in services, advanced manufacturing and consumer markets is exhibiting strong growth potential.

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New Paper of the East Asia Foundation Explores South Korea’s Growth

According to the author, as a result of South Korea’s period of compressed, high economic growth, the fervor that South Koreans have for growth has become a sort of cultural gene. A strong faith in meritocracy has developed. Yet recently, the trickle-down effect of South Korea’s economy has reached its limit, and the possibility of a collapse of the patrimonial middle class, as discussed by Thomas Piketty, is becoming a reality for South Koreans. The metaphor of growth disguised under the name of reform will again push away the challenges of economic democratization, and the deterioration of economic democracy combined with stagnant growth will eventually lead to a retreat in political democracy. Now is the time to seek a great escape from the nostalgia for growth.
Press-release at the East Asia Foundation official web-site

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OECD released a multi-dimensional review of Kazakhstan

The review covers a broad range of issues, e.g. quality of life in Kazakhstan, economic growth, sectoral competitiveness, public governance etc.
According to the review, Kazakhstan’s economy and society have undergone deep transformations since the country declared independence in 1991. Kazakhstan’s growth performance since 2000 has been impressive, averaging almost 8% per annum in real terms and leading to job creation and progress in the well-being of its citizens. Extractive industries play an important role in the dynamism of the economy, but sources of growth beyond natural resource sectors remain underexploited.

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New Lowy Institute paper explores four key narratives that help explain the way that China acts in and interprets the world

According to the author, four narratives are key to understanding China’s worldview as it relates to foreign policy: the century of humiliation; cultural characteristics as being inherent and unchanging; history as destiny; and filial piety and familial obligation as they apply both inside China and to China’s neighbours.
The author emphasizes that the narratives also help to explain recent Chinese geo-economic initiatives such as the One Belt, One Road initiative and the AIIB. One Belt, One Road focuses on connectivity and cooperation among countries, principally in Eurasia. The primary purpose of the AIIB is to address the infrastructure needs of the Asia-Pacific. It will do this primarily by funding projects in emerging markets that other international banks are unwilling to fund. Both initiatives reflect the century of humiliation narrative and the idea of history as destiny. The AIIB and One Belt, One Road are portrayed within China as evidence that China is finally overcoming its period of weakness and vulnerability. As one Chinese academic noted to the author, these initiatives represent “a great shift from the idea of just taking care of ourselves.” These initiatives are seen as a way for China to resume its rightful position as a wealthy, strong, and responsible power, at the centre of a web of regional economic interdependence.
Full text at the Lowy Institute official web-site

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