Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

PK Basu has 34 years experience covering Asia's economies and markets (equities, fixed income and currencies), including 20 years covering the global economy. He was Chief Economist (SE Asia & India) at Credit Suisse First Boston for 5 years, and Chief Asia (x-Jpn) Economist at Daiwa Securities for a similar period. Among other roles, he was global head of research at Maybank Kim Eng, Malaysia equity research head and chief ASEAN economist at Macquarie, Chief Economist at ICICI Securities, ASEAN economist at UBS and the first chief economist at Khazanah Nasional (where he was co-head of research, and led all agri-business initiatives). PK Basu started his career in the Asia Service of WEFA (Wharton Econometrics) in Philadelphia in 1990, rising to be Director of their Asia Service in June 1994. 
PK's book, "Asia Reborn: A continent rises from the ravages of Colonialism and War to a New Dynamism" won the Tata Literature First Book Award (non-fiction) for 2018. It is the first single chronicle of the modern economic and political history of the whole of Asia (from Iraq and Turkey to Korea and Japan, and everything in between), told from an Asian perspective.

Chief Economist & Political Strategist

REAL-Economics.com

Thematic (Sector/Industry)

Until 1H 2016, Vietnam was the solitary bright spot among Asia's exporters. Its export performance has remained strong in the past eight months, but first India and then Singapore and Indonesia joined the export-recovery bandwagon in 3Q 2016, then Taiwan and Korea vigorously jumped on in 4Q 2016. The early evidence suggests that 2017 will be a year of spectacular Asian export growth. Korea's exports jumped 15.7% YoY and Taiwan's 17.5% YoY in Jan-Feb 2017, while Indonesia's rose 27.7% YoY in January. The one exception to the export revival is China (in a near mirror image of 1996, when Asian exports stalled while China's pressed ahead). Diminishing supplies of migrant labour post-CNY, rising costs exacerbated by the relative strength of the RMB (all similar to Thailand in 1997) are curtailing China's exporters' ability to compete with the rest of Asia.  Strong intra-Asian demand is the main driver of this Asian export rebound, complemented by a decent recovery in Emerging Market and European demand. Thus far, US demand has been a relative laggard, and no more than a tertiary factor in Asia's export recovery. But ISM new orders, an excellent 6-month leading indicator of US demand for imports from Asia, has soared over the past half year -- and hit a 38-month in February 2017, suggesting that Asia's exports to the US too should be growing over 10% YoY by August 2017. The main threat to the sustainability of that robust rebound in US import demand is the growing certainty of the US imposing a border tax adjustment (BTA) by the time the new fiscal starts on 1 October 2017. The second threat to the Asian export recovery is that intra-Asian demand was ultimately made possible by China's success in boosting materials prices in 2H 2016 -- accomplished via a judicious mix of output curbs (on steel, other metals and coal) and a surge in TSF (up 19.9% YoY in 2016). China still had a trade surplus of US$493bn in the 12 months to February 2017 (albeit down from US$577bn in the 12 months to February 2016), with the reduction (and the modest rebound in the RMB) perfectly timed to forestall a US Treasury department concluding (in its April 2017 report) that China is a currency manipulator. But the weakness of China's exports and the strength of its imports are an indication that the current policy mix is ultimately unsustainable. When the cracks widen, China will have to abandon that policy mix (probably just after the politburo leadership changes in November 2017). There is a Sword of Damocles hanging over Asia's export recovery (and its intra-Asian provenance in particular), but the Sword will not fall until 4Q 2017. Until then, enjoy the ride!

Until 1H 2016, Vietnam was the solitary bright spot among Asia's exporters. Its export performance has remained strong in the past eight months, but first India and then Singapore and Indonesia joined the export-recovery bandwagon in 3Q 2016, then Taiwan and Korea vigorously jumped on in 4Q 2016. The early evidence suggests that 2017 will be a year of spectacular Asian export growth. Korea's exports jumped 15.7% YoY and Taiwan's 17.5% YoY in Jan-Feb 2017, while Indonesia's rose 27.7% YoY in January. The one exception to the export revival is China (in a near mirror image of 1996, when Asian exports stalled while China's pressed ahead). Diminishing supplies of migrant labour post-CNY, rising costs exacerbated by the relative strength of the RMB (all similar to Thailand in 1997) are curtailing China's exporters' ability to compete with the rest of Asia.  Strong intra-Asian demand is the main driver of this Asian export rebound, complemented by a decent recovery in Emerging Market and European demand. Thus far, US demand has been a relative laggard, and no more than a tertiary factor in Asia's export recovery. But ISM new orders, an excellent 6-month leading indicator of US demand for imports from Asia, has soared over the past half year -- and hit a 38-month in February 2017, suggesting that Asia's exports to the US too should be growing over 10% YoY by August 2017. The main threat to the sustainability of that robust rebound in US import demand is the growing certainty of the US imposing a border tax adjustment (BTA) by the time the new fiscal starts on 1 October 2017. The second threat to the Asian export recovery is that intra-Asian demand was ultimately made possible by China's success in boosting materials prices in 2H 2016 -- accomplished via a judicious mix of output curbs (on steel, other metals and coal) and a surge in TSF (up 19.9% YoY in 2016). China still had a trade surplus of US$493bn in the 12 months to February 2017 (albeit down from US$577bn in the 12 months to February 2016), with the reduction (and the modest rebound in the RMB) perfectly timed to forestall a US Treasury department concluding (in its April 2017 report) that China is a currency manipulator. But the weakness of China's exports and the strength of its imports are an indication that the current policy mix is ultimately unsustainable. When the cracks widen, China will have to abandon that policy mix (probably just after the politburo leadership changes in November 2017). There is a Sword of Damocles hanging over Asia's export recovery (and its intra-Asian provenance in particular), but the Sword will not fall until 4Q 2017. Until then, enjoy the ride! 

VinaCapital Vietnam Opportunity Fund (VOF LN)

Vietnam Enterprise Investments (VIETENI KY)

North Bangkok Power Plant Block 1 Infrastructure Fund (EGATIF TB)

North Bangkok Power Plant Block 1 Infrastructure Fund

Asia's Export Recovery Set to Strengthen -- Although Trump's BTA and China Are Threats After October