In today’s briefing:
- China: Imbalances In The Economy Rise To The Fore As Growth Slows
- CX Daily: The Evolution Of Crime In China
- Brent Prices: Direction Of Travel Is Down In The Absence Of Additional Catalysts
- Indonesia: Bright Portents From Influx Of FDI
China: Imbalances In The Economy Rise To The Fore As Growth Slows
- The latest PMI surveys show that stimulus measures are taking effect but are unable to offset the drags from renewed lockdowns, weaker external demand and the deflating real estate sector.
- The slowdown has now reached a point where the imbalances in the economy could be crystallised and so precipitate broader challenges to stability.
- Financial imbalances are a key source of risk. Much focus has been on default risks in the over-leveraged property sector, but we highlight growing default risks at LGFVs as well.
CX Daily: The Evolution Of Crime In China
Crimes / Cover Story: The evolution of crime in China.
Seoul / Chinese nationals among scores dead in Seoul crush.
Personnel / Rising Communist Party star Yin Yong named acting mayor of Beijing. .
Brent Prices: Direction Of Travel Is Down In The Absence Of Additional Catalysts
- Brent crude prices have traded sideways in recent weeks, despite OPEC’s decision to double down on the output cuts.
- While global supply remains tight, our view is that oil prices will still trend down moving forward toward the USD80-USD100 range.
- For the region, lower oil prices will lessen the squeeze on real incomes, and dampen price pressures. Lower import costs will also narrow trade imbalances.
Indonesia: Bright Portents From Influx Of FDI
- Inflows of FDI into Indonesia jumped sharply in 3Q22 (+66.4%), by attracting significant investments in the nickel downstream refining sector.
- There may also be green shoots of a manufacturing renaissance, given the growing share of FDI into Central and East Java.
- The influx of FDI portends well for productivity growth via greater investments and foreign involvement, and stability through a positive basic balance (CA + FDI).
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