Low Soo Peng Singapore Business
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Transcript of Low Soo Peng Singapore Business
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Washington State Export Destinations 2011 Value (Millions) % Share
Top 25 Markets and % Share of State Total $56,669 87.5
1 China 11,233 17.32 Canada 8,547 13.23 Japan 6,468 10.04 Korea, South 3,261 5.05 United Arab Emirates 2,753 4.36 Hong Kong 2,079 3.27 United Kingdom 2,017 3.18 Turkey 1,760 2.79 Australia 1,718 2.710 Taiwan 1,715 2.611 Indonesia 1,587 2.5
Asian Markets as Share of Washington State Exports = 46 %
Worth over $26 billion in 2011
16. Singapore, 1.5% 19. Malaysia, 1.3% 22. Philippines, 1.2% 24. India, 1%
Source: US Census Bureau
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CHINA 2012 IN REVIEW
Leadership Transition
Slowing economic growth
Local government debt situation
Falling real estate prices Debt problems, slower growth, weak export
demand
Increased outbound investment Continued friction in the South China Sea
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CHINA 2012 ECONOMIC GROWTH
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NEW POLITBURO STANDING COMMITTEE
President Xi Jinping Premier Li Keqiang
Zhang Dejiang Yu Zhengsheng Liu Yunshang Wang Qishan Zhang Gaoli
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CHINA 2013 OUTLOOK
Economic growth stable Exports remain depressed
Real estate prices declining
Debt problems slow growth Continued emphasis on
innovation
Increased outbound investment Continued friction in the South
China Sea
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OVERALL SLOWING ECONOMIC GROWTH
-1
0
1
2
3
4
5
6
7
8
Optimistic Base Pessimistic Optimistic Base Pessimistic
Total Factor Productivity
Capital Contribution
Labor Composition
Labor Quantity
Percent growth, y-o-y
Sources: The Confe rence Board Global Economic Outlook 2013, https://www.conference-board.org/data/globaloutlook.cfm?
2013-2018 2019-2025
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CHINA GROWTH AREASIN 2013
Planning for Demographic changes
Renewable energy
Online retailing
Infrastructure
Construction / real estate
Pollution mitigation and control Clean and green food products + investment in
overseas agriculture
Expanded acquisition of overseas resources
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CHINA 2013 RISK FACTORS
Diaoyutai / Senkaku Conflict
Pollution
Corruption & Anti-corruption efforts
Rising costs
Economic inequality
Bankruptcy of some smaller cities Growth of unregulated lending sector
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INDONESIAS PERFORMANCE: 2012 IN REVIEW
Source: Bank of Indonesia
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2012 HIGHLIGHTS
IndonesiaFinancialServices
Authority(OJK)formed
Moodysupgradessovereign
credit ratingto investmentgrade: Baa3
from Ba1(Outlook:Stable)
Central
Banklowers BIrate to5.75%
(from 6%)
Largestcontract in
commercial &Boeing
history: LionAir order of230 Boeing
737 airplanesworth $22.4
billion
GarudanamedBest
InternationalAirline
Foreignexchange
reserves hitshighest level
(2012) of$114.93billion
S&P affirms
sovereigncredit rating
at BB+(Outlook:Positive)
Jakarta electsnew Governor
Joko (Jokowi)Widodo (snubspolitical
establishment)
McKinseyreleases
UnleashingIndonesias
PotentialReport:
Now 16th.2030, couldbe worlds7th largesteconomy,
surpassingGermany &UK)
Indonesia
topsNielsonGlobal
ConsumerConfidenceSurvey (Q32012) withscore of
119,(alongside
India).
Fitchaffirmed
sovereigncredit
rating atBBB-
(Outlook:Stable)
Indonesia, asnext APEC
Chair,announces2013 logo &
theme:Resilient Asia-
PacificEngine of
Global Growth
January
January 18
January
February
February
April
April 23
September
September
November
November 21
December
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GOODBUTLOWERPERFORMANCE: WHY?
Crisis in Europe & recession in US Instability in Middle East & Africa Slower economic growth in emerging countries esp. China & India
Trade imbalance with declining exports (& burgeoning imports)
Global economicuncertainty
Overburdened airports: Jakartas CGK at beyond capacity past 6 years Poor condition of ports: Unable to keep up with economic growth Bad roadways, bad traffic; floods
Poor connectivity between towns/cities/regions Policies & regulations deemed as hindrance to businesses
Weak infrastructure &
high logistics costs
Government initiatives
Strong domestic consumptiondriven by emerging middle
class
Influx of investments
Master Plan MP3EI (2011- 2025): Economic development
Master Plan MP3KI (2011- 2025): Poverty reduction
Tax incentives
Highest contributor to economy: 2/3 of GDP
240 million (Worlds 4th most populous nation)
45 million consuming class (to to 135 million in 2030)
Robust consumer confidence with surge in government & private sectorprojects
Second biggest contributor: 30% of GDP Regaining of investment grade: Fitch in Dec. 2011 & Moodys in Jan. 2012
AT Kearney FDICI: Ranked #9 in the world (from 19 in 2010)
2012 realization may top $31 billion (Rp. 300 trillion), a record
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OUTLOOKFOR 2013 POSITIVE
Annual GDP growth target set at 6.8 % (BI forecast: 6.3% - 6.8%)
Domestic consumer demand 65% of GDP = less vulnerable to Europe & US drag
Fitch: Affirmed RIs investment grade at BBB- (stable outlook); boost joining BRICS
Investment realization targeted to increase to Rp. 390.3 trillion (FDI $29 billion)
Household consumption (to 5.8 6.3%) & investment (to 10%) will continue to drivegrowth
Govt set inflation rate assumption at 3.5% - 5.5%
Government to hold BI rate steady at 5.75% (since March 2012)
Per capita income rising & middle class growing (to expand to > total population)
Oil & gas investment to increase: $26.2 billion: 274 work plans & budgets approved
Exploding gas demand = efforts to reduce exports + expand downstream capacity
Sales of capital goods, including machine tools, will rise 8% to $27 billion
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RISKS & CONCERNS
Endemiccorruption/Judiciary a
problem: 118in list of 176 countries
(Transparency International)
Rising inflation fromdomestic fuel subsidies &
power tariff hike
Weak institutions &bureaucratic
inefficiencies: 128 out of185 globally
(World Banks Doing Business)
Political uncertainty:2014 elections
Infrastructure congested& inadequate to support
growth; respond tonatural disasters
Lack of institutions withstrong capital structure tofinance planned projects
Crisis in developedworld: Threaten exports,
foreign liquidity,investment growth
Emerging trend of tradedeficits fueling current
account deficits & hurtingthe Rupiah
Under-developed HR:Low-skilled workforce +Minimum pay increase
not matched withincrease in productivity
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REASONSTOBEOPTIMISTIC + OPPORTUNITIES
Master plans to guidedevelopment & growth:
Impetus for change
Relative political &economic stability:
Conducive to business
Strong & growingdomestic demand: Fuelgrowth, limit exposure
to external shocks
Poverty reductionmeans growing middle
class
Growing middle classmeans better qualified
workforce & biggermarket
Positive investmentoutlook thanks to strongeconomic fundamentals
Abundance of fertileland & natural
resources
Financial marketspoised for volatility:
Stock market tomaintain goodperformance
Financial stability:Investor confidenceevident in influx ofcapital investment
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PUBLICDEBTBURDENS (% OFGDP)
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AT KEARNEY 2012 FDICI