In this briefing:
- Mildly Expansionary, but Socially Magnanimous While Staying Focused on Long-Term Competitiveness
- January Headline Data for China
- Trade Talks/Tech Trouble/ Rural Revival/Data Digest /Bad Bonds
1. Mildly Expansionary, but Socially Magnanimous While Staying Focused on Long-Term Competitiveness
Singapore’s growth in 2017 and 2018 has been primarily productivity-driven, suggesting that the 5-year project of reducing dependence on foreign workers (of all skill levels) is finally bearing fruit. The 2019 Budget further lowered the ceiling on employing foreigners in the services sector, and withdrew the NOR scheme from 2002 that was aimed at attracting senior executives with regional/global roles.
The healthy twin surpluses are evident even amid the fog of ultra-conservative fiscal accounting (which excludes land sales and investment income from GIC, MAS and Temasek from revenue, and only includes a small part of their past earnings as a “net investment return contribution”). The small stimulus was aimed mainly at providing a slew of health and other benefits to those born between 1950 and 1959 (the “Merdeka Generation”); the previous “Pioneer Generation” having already been rewarded previously. These are sensible interventions to reduce inequality.
This year, we estimate that Singapore’s real GDP will decelerate to 2.8% growth (from 3.7% in 2017 and 3.2% in 2018) as the global electronics cycle turns downward — evident in the sharp slump in non-oil domestic exports in Dec18 and Jan19. But Singapore’s twin surpluses have ample room to provide a substantial fiscal stimulus should the global economy worsen substantially further.
2. January Headline Data for China
Sometimes at Balding’s World we explore worm holes of Chinese data. Yes, granular data is awesome, but the global economic calendar should not be overlooked nor headline data taken for granted. To that end today we take a look at some key figures to recently emerge.
3. Trade Talks/Tech Trouble/ Rural Revival/Data Digest /Bad Bonds
China News That Matters
- Will tariff hike be delayed to May?
- Like rugby without the All Blacks!
- Funding the farmers – with better financial services
- Good signs, bad signs
- High time for a check-up
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.
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