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

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Macroeconomics

During China's trade recession, its trade surplus widened between May 2014 and August 2016 -- hurting trading partners, as China's imports contracted. ASEAN was the biggest sufferer, as its bilateral trade surplus with China (prior to 3Q 2012) swung to a massive deficit of US$92.8bn in the year to October 2015 (and a bilateral deficit of US$72.2bn in the 12 months to November 2016). India has had a steadily-widening bilateral trade deficit with China, but its trend didn't change with fluctuations in China's imports. Taiwan has by far the largest bilateral trade surplus with China (US$115.9bn in 2013, US$106bn in 2014, US$99.9bn in 2015) followed closely by South Korea ($91.8bn in 2013, US$90bn in 2014, US$73.1bn in 2015). Korea has suffered notably more than Taiwan from China's trade recession. This year too, Taiwan's bilateral trade surplus with China bottomed at US$94.6bn in the 12 months to July 2016, but widened to US$98.5bn in the 12 months to November 2016 -- while Korea's bilateral trade surplus with China continued to shrink to US$64.3bn in the 12 months to November 2016. As long as China can sustain its import recovery (which began in August 2016), the biggest winners will be Taiwan and ASEAN, whose bilateral trade balances with China will improve. When China's import recovery (driven by the renewed strength of China's FAI and credit since August 2016) runs out of steam by mid-2017 (squeezed by the combination of higher US interest rates and barriers to China's exports, which will reduce the need for imports), ASEAN's gains will peter out, although Taiwan will be less affected bilaterally. Given China's massive bilateral trade surplus with the US (US$320bn in the 12 months to October 2016), the incoming Trump Administration and the bipartisan Schumer-Lindsey team in the Senate are likely to label China a "currency manipulator" in 1Q 2017 and impose punitive tariffs on China's imports. Vietnam will remain the biggest winner from the trade diverted from China. (We expect that the US corporate tax code will be altered to tax imported expenses only from the next fiscal year, starting October 2017). Initially, US imports are likely to strengthen as infrastructure spending and the prospect of corporate tax cuts boosts private investment -- and helps bolster US imports (aided also by the strong dollar). The other winners (apart from Vietnam) are likely to be Malaysia, India, Thailand and Singapore (in that order). Taiwan could benefit too if its companies succeed in moving their assembly operations from China to Vietnam/India (as many are doing). India and Vietnam have steadily gained US market share over the past decade (from low bases), while Malaysia, Thailand and Singapore have gradually regained (in the past 2 years) some of the market share they lost in the US since the AFC of 1998-2000. These trends of rising market shares in the US for India and ASEAN are likely to accelerate when China's imports are subjected to new tariffs in 1H 2017.

During China's trade recession, its trade surplus widened between May 2014 and August 2016 -- hurting trading partners, as China's imports contracted. ASEAN was the biggest sufferer, as its bilateral trade surplus with China (prior to 3Q 2012) swung to a massive deficit of US$92.8bn in the year to October 2015 (and a bilateral deficit of US$72.2bn in the 12 months to November 2016). India has had a steadily-widening bilateral trade deficit with China, but its trend didn't change with fluctuations in China's imports. Taiwan has by far the largest bilateral trade surplus with China (US$115.9bn in 2013, US$106bn in 2014, US$99.9bn in 2015) followed closely by South Korea ($91.8bn in 2013, US$90bn in 2014, US$73.1bn in 2015). Korea has suffered notably more than Taiwan from China's trade recession. This year too, Taiwan's bilateral trade surplus with China bottomed at US$94.6bn in the 12 months to July 2016, but widened to US$98.5bn in the 12 months to November 2016 -- while Korea's bilateral trade surplus with China continued to shrink to US$64.3bn in the 12 months to November 2016. As long as China can sustain its import recovery (which began in August 2016), the biggest winners will be Taiwan and ASEAN, whose bilateral trade balances with China will improve. When China's import recovery (driven by the renewed strength of China's FAI and credit since August 2016) runs out of steam by mid-2017 (squeezed by the combination of higher US interest rates and barriers to China's exports, which will reduce the need for imports), ASEAN's gains will peter out, although Taiwan will be less affected bilaterally. Given China's massive bilateral trade surplus with the US (US$320bn in the 12 months to October 2016), the incoming Trump Administration and the bipartisan Schumer-Lindsey team in the Senate are likely to label China a "currency manipulator" in 1Q 2017 and impose punitive tariffs on China's imports. Vietnam will remain the biggest winner from the trade diverted from China. (We expect that the US corporate tax code will be altered to tax imported expenses only from the next fiscal year, starting October 2017). Initially, US imports are likely to strengthen as infrastructure spending and the prospect of corporate tax cuts boosts private investment -- and helps bolster US imports (aided also by the strong dollar). The other winners (apart from Vietnam) are likely to be Malaysia, India, Thailand and Singapore (in that order). Taiwan could benefit too if its companies succeed in moving their assembly operations from China to Vietnam/India (as many are doing). India and Vietnam have steadily gained US market share over the past decade (from low bases), while Malaysia, Thailand and Singapore have gradually regained (in the past 2 years) some of the market share they lost in the US since the AFC of 1998-2000. These trends of rising market shares in the US for India and ASEAN are likely to accelerate when China's imports are subjected to new tariffs in 1H 2017. 

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

Globalizing China's Imbalances, Part III: Trade Recession and Its Sufferers