Economist, Centennial Asia Advisors

Nicholas Chia

Centennial Asia Advisors deliver timely and accurate economic and political analysis to investors, focused on anticipating key turning points that affect the client’s interests in the Asia-Pacific region. Clients include public agencies and central banks, as well as fund managers and investment banks. The company draws strength from its flexibility to tailor products to fit client’s specific interests. It provides detailed macro-economic forecasts, scenario analysis and timely assessments of how specific major economic and political developments may affect a client’s areas of interest. At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way.

Economist

Global Supply Chain Crisis - Signs of Thawing Out?

Asia On The Ascendancy, But Supply Could Struggle to Keep Up

Omicron Variant Fuels Uncertainty over Growth And Inflation, Sharpens Policy Dilemmas

Covid-19: Too Much Pessimism Over Southeast Asia

COVID-19: Lull In Caseloads May Prove To Be Fleeting Amid Ample Epidemiological Uncertainty

Covid-19: How Much Will Scarring Hurt The Regional Economies?

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Macroeconomics

<ul style="list-style-type: square;">
<li>Freight rates, although elevated by historical standards, have stabilised. Energy prices are hitting levels that are causing demand destruction as buyers balk at paying high prices. On chips and electronics, supply should start playing catch up from end-2022; in the interim, demand will remain strong because of IoT, growing digitisation and the revival of business capex, which will all be supportive of high-beta Asian exporters.</li>
<li>Longer-term, there will be a rethink of supply chain resilience as the bottlenecks remind firms of the dangers of having single points of potential failure, a trend that was already given a spring in its step after the earlier US-China trade war. The Covid-19 pandemic has only accentuated and exacerbated the worst of supply chain fragility. There will also be a rectification of under-investments in capacity and inventory-building, with a renewed focus on flexibility in production.</li>
</ul>There are 3 broad implications for Asia, most of which are negative.<ul style="list-style-type: square;">
<li>
The gradual resolution of bottlenecks will support growth in 2022 as supply plays catch-up to still-robust demand.</li>
<li>
The spillover of higher costs to Asia will be well-contained because of sizeable slack across the region that dampens the pass-through from the supply-side disruptions. Energy inflation is a concern, but there are no indications of second-order effects of price pressures broadening out into other components of the CPI basket yet.</li>
<li>
The biggest risk stems from an abrupt policy correction. If the Fed is forced to tighten ahead of expectations, Asian currencies could come under pressure as risk appetites sour. Asian central banks will have to do the same to safeguard yield differentials, or risk a run on the domestic currency.</li>
</ul>


Freight rates, although elevated by historical standards, have stabilised. Energy prices are hitting levels that are causing demand destruction as buyers balk at paying high prices. On chips and electronics, supply should start playing catch up from end-2022; in the interim, demand will remain strong because of IoT, growing digitisation and the revival of business capex, which will all be supportive of high-beta Asian exporters.
Longer-term, there will be a rethink of supply chain resilience as the bottlenecks remind firms of the dangers of having single points of potential failure, a trend that was already given a spring in its step after the earlier US-China trade war. The Covid-19 pandemic has only accentuated and exacerbated the worst of supply chain fragility. There will also be a rectification of under-investments in capacity and inventory-building, with a renewed focus on flexibility in production.
There are 3 broad implications for Asia, most of which are negative.

The gradual resolution of bottlenecks will support growth in 2022 as supply plays catch-up to still-robust demand.

The spillover of higher costs to Asia will be well-contained because of sizeable slack across the region that dampens the pass-through from the supply-side disruptions. Energy inflation is a concern, but there are no indications of second-order effects of price pressures broadening out into other components of the CPI basket yet.

The biggest risk stems from an abrupt policy correction. If the Fed is forced to tighten ahead of expectations, Asian currencies could come under pressure as risk appetites sour. Asian central banks will have to do the same to safeguard yield differentials, or risk a run on the domestic currency.


The Great Shortage: Negative Implications for Asia (And Not In The Way You'd Expect)