Economic systems

People ride escalators at a business district in Beijing, China, on 16 May 2022. (Wang Zhao/AFP)

China's unified national market has its drawbacks and challenges

The Chinese government has recently announced plans to establish a unified national market that is highly efficient, standardised, open and competitive. It would break down walls, raise the standards of the business environment within China and act as a buffer against external pressures. While the intention is good, NUS academic Lu Xi points to possible drawbacks and challenges.
Young women look at panorama of Moskva River and Kremlin at a viewpoint in central Moscow, Russia, 22 March 2022. (Maxim Shemetov/Reuters)

Will de-dollarisation help China and Russia shape a new world order?

Russia and China have a common interest in being less reliant on the dollar in the face of sanctions or anticipated sanctions. But are they moving at the same pace and will their efforts be significant enough to achieve self-reliance and precipitate a sea change in the global economic order?
This file handout picture taken and released on 17 December 2019 by the Indonesian Presidential Palace shows Indonesia's President Joko Widodo (left) during his visit to North Penajam Paser district near Sepaku in East Kalimantan, where the government plans to build its new capital city replacing Jakarta. (Handout/Indonesian Presidential Palace/AFP)

Jokowi's plan for Indonesia's new capital: Who benefits?

A law recently passed by the Jokowi government regarding the relocation of the nation's capital to East Kalimantan has generated much controversy. ISEAS academic Leo Suryadinata notes that while there are objections relating to the conservation and ecology in Kalimantan, greater protests are coming from the anti-Jokowi camp that believe only a handful of wealthy people will benefit, and fear that the new capital will be controlled by foreign countries, especially China. Jokowi is in a race against time to move the capital before the next election.
A man wearing a protective mask is seen inside the Shanghai Stock Exchange building at the Pudong financial district in Shanghai, China, 28 February 2020. (Aly Song/Reuters)

Digitalisation: How China’s smaller investment banks could compete with big foreign players

The recent accelerated opening up of China’s capital market has presented a challenge to investment banks in China, which may have seen their role marginalised or bypassed by major foreign players who have international experience and are highly capitalised and better managed. Academics Pei Sai Fan and Peng Chang suggest how investment banks in China can compete and stay relevant.
People walk by the New York Stock Exchange (NYSE) in the Financial District on 26 January 2022 in New York City. (Spencer Platt/AFP)

America's new reality of high inflation and what it means for the world

Despite past macroeconomic stability, the US economy is beginning to see increased inflation across many sectors. Reports say that US consumer price figures for January due on Thursday could show core inflation rising to the fastest pace since 1982 at 5.9%. The situation is not helped by the government's recent move to issue additional debt which was mostly purchased by Fed banks. If the US government defaults on its debt, the global financial market will be affected. Higher interest rates to fight inflation in the US may also require that China and other Asian economies adjust their own domestic policies on interest rates and exchange rates.
People walk past the headquarters of the People's Bank of China (PBOC), the central bank, in Beijing, China, 28 September 2018. (Jason Lee/Reuters)

China’s 2022 economic growth will start low and end high

China's 2021 quarterly economic figures showed a general weakening, falling to a low 4% in the fourth quarter. While international analysts are of the view that China’s economy is in rapid decline, Gu Qingyang thinks otherwise. But that does not mean China's road ahead in the new year will be smooth sailing. Policies will need to be tweaked to ensure a stable economic trajectory in 2022.
A woman walks on a sidewalk in the central business district in Beijing on 16 December 2021. (Greg BakerAFP)

China to prioritise economic stability ahead of CCP 20th Party Congress

While China’s economy grew about 8% in 2021, the GDP growth target for this year is expected to be a more modest “above 5%”, taking into consideration various easing measures by the central bank and political considerations heading into the 20th Party Congress in autumn this year. Zaobao’s associate editor Han Yong Hong gives her assessment.
Traders work on the floor of the New York Stock Exchange (NYSE) on 15 November 2021 in New York City. (Spencer Platt/AFP)

What financial decoupling?

Claims that financial decoupling will occur between China and the US are not yet evident from the trade data, says NUS academic Christopher J. Voisey. In 2020, FDI inflows in China increased by 6% and the ease of doing business improved. And while there have been greater hurdles for Chinese companies seeking US listings, their stocks are often still available to foreign investors through alternative channels. Might some turbulence be par for the course as China seeks stronger autonomy and economic power?
The US Capitol in Washington, DC, US, on 7 October 2021. (Stefani Reynolds/Bloomberg)

Why credit rating firms stay silent on the US's recurring sovereign debt woes

So far, Fitch is the only one of the “big three” credit rating agencies to release a statement raising the possibility of a review of the US sovereignty rating with negative implications. Financial commentator Tan Haojun says that the three agencies are giving the US a lot of leeway that would probably not be given to other countries, when they should be impartial and fair in giving a rating.