Essay on Economics of Far East Countries

Essay on Economics of Far East Countries

Length: 938 words (2.7 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Some countries in Asia have sufficient latitude on the fiscal front. Singapore and Hong Kong are highly fiscally flexible – both have been running years of fiscal surpluses, have negative net government debt (due to large fiscal reserves – S&P estimates HK and Singapore’s net general government debt position at -32.6% and -83.9% of GDP, respectively, in 2010) and can provide a backstop if economic conditions significantly deteriorated, though historically, Singapore has been more fiscally interventionist than Hong Kong. Korea has relatively low general government debt at 31% of GDP), incurred a better than expected fiscal surplus last year and have been historically quite activist in its fiscal policy, as demonstrated by the post Lehman environment where, outside of China (which funded a big part of its stimulus off-budget via banks), Korea had the largest fiscal stimulus program in 2009. With Korea’s National Assembly elections coming up in April 2012, presidential elections in December 2012, we expect formulation of next year’s budget will be sensitive to global conditions. China has significant fiscal flexibility as well. We think the concerns about contingent liabilities and local government debt burden and more limited fiscal space in China is overblown. China’s outstanding central government debt together account for about 18% of GDP, and if we assumed that the RMB10.7 trillion (27% of GDP) of local government related debt announced by the National Audit Office at the end of 2010, then general government debt would still only be around 45% of GDP (though if we net out Chinese government deposits, it would be about 43% of GDP and the net figure would be even lower if we factored in financial assets of SOEs. Moreover, growth h...


... middle of paper ...


...debt whose perceived risk profile has notably changed; 3) with inflation risks still a concern but US rates at near-zero levels for longer, the monetary policy mix may be shifting now to tightening via RMB appreciation than using interest rate/liquidity tools, and the best time to let RMB move faster without exacerbating speculative capital inflow is when global risk sentiment is poor and offshore speculative positioning has lightened up. CNY stability coupled with central bank FX intervention in a region where inflation risks are still there could help keep Asia FX relatively low beta vis-à- vis other risk currencies. In the near-term, we would remain very cautious and we would be lightly positioned – though bouts of weaknesses could provide opportunities for countries with solid fundamentals and where central bank provides support to cap volatility – KRW and IDR.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essence of Korean Studies in our Local Universities Essay

- I feel that Korea needs no introduction. Friends who have visited say their stay could only be equated to that of being in outer space. It is remarkably extraordinary. I look forward to proving the veracity of the statement once I visit in the near future. However with my limited knowledge, the Korea I know is one resilient and self-driven nation. It has gone through thick and thin to emerge as the 12th largest trading nation and its influence is vast and far reaching. In recent years, we have seen Korea emerge not only as an influential nation but as a world super-power....   [tags: Far eastern countries and cultures]

Better Essays
1561 words (4.5 pages)

The European Union: Economics, Policy and History’ by Susan Senior Nello

- ... These researchers looked at the ‘correlation of demand and supply shocks between the new Central and East European member states and the euro area during the 1990s’ (207). The author claims that reasons why the European Union is not an Optimal Currency Area is due to the selection-process of the countries that are allowed to be part of the European Monetary Union. The European Union that started out with the European Steel and Coal Community (Gillingham ix) was intended as a community to optimize the economic results....   [tags: chapter 9 analysis, economics, policy-making]

Better Essays
1724 words (4.9 pages)

The Effect of the Chinese Economy to the Future Prosperity of Developing Countries

- Examine the significance of the effect of the Chinese economy to the future prosperity of developed and developing countries There is much speculation as to China's economic future, underlined of late by their entry into the World Trade Organization (WTO). There is no doubt that China has the potential to become one of the most economically powerful nations in the world as it has access to vast numbers of employees in the labour pool. China's population now exceeds the one billion mark. In fact, it is predicted by the WTO's next director-general, Supachai Panitchpakdi, that if all goes well in the subsequent period after China's entry into the WTO, the country will become one of the two or...   [tags: Economics]

Better Essays
1953 words (5.6 pages)

The Return of Depression Economics Essay

- The Return of Depression Economics From the many economy-related books available I read The Return of Depression Economics by Paul Krugman. This book was written during the Asian financial crisis of the late 1990’s. Many say that Krugman wrote this book much too quickly to be fully correct on every issue that he wrote about in this book. Krugman mainly focuses on financial crises of the 1990’s and mostly on the Asian financial crisis. This book was very interesting to read even though I did not fully understand every issue he covered....   [tags: essays papers]

Free Essays
1209 words (3.5 pages)

Trade Agreements Between the European Union and Developing Countries Essay

- The Uruguay Round Agreements and the establishment of the World Trade Organisation, have strengthened the Multilateral Trading. At the same time, there has been more agreements in the world economy. The European Union has been major driving force behind the force of such agreements This report evaluate and explores the complex structures of recent free trade agreements between the European Union and developing countries, the main factors determining their economic effects, and presents quantitative simulations of the effects of these agreements....   [tags: market barriers,world economy, free trade]

Better Essays
2052 words (5.9 pages)

Drinking Water and Irrigation Water Shortages in the Middle East Essay

- One would think there are enough conflicts to be had in the Middle East. The area is simply a breeding ground for turmoil, and has been for centuries. Of the many conflicts that revolve around the areas history, politics, religion, territory or ethnicity, one more can be added to the group: water. These societies all need water, but not all have the same resources to get to that water. What is the hotbed of vice in this situation is only a few of the countries in the Middle East have total control over their own water, leaving most of the others to depend on the graces of those few countries to manage their water magnanimously enough to supply them with what they need....   [tags: Geography Economics Papers]

Better Essays
2245 words (6.4 pages)

Essay on Far East Asia's Economic Data

- While the growing downside risks for advanced economies grow, Asia’s economic data has been holding up relatively well, with resilient domestic demand and a surprisingly strong bounce. The primary conduit in which Asia will be affected is the export-driven economies. The July export growth numbers released so far by three countries – China (+20.4% year-over-year), Korea (+27.3%) and Taiwan (+17.6%) – all significantly exceeded expectations, indicating a sharper month-over-month acceleration of final demand and was consistent with the earlier view that some of the temporary drags to final demand – Japan supply disruption and previously higher gas prices – were reversing....   [tags: Trade, Economic Growth]

Better Essays
1050 words (3 pages)

Impact of the Economic Global Crisis: Current Situation and Prospects in the Philippines

- Impact of the Economic Global Crisis: Current Situation and Prospects in the Philippines Asia in general was not affected by the current global financial crisis (1). The source of the crisis did not come from the developing countries as seen in the 1990s during the Asian crisis. In 2008 - 2009, the developed world initiated the global financial crisis with the sub prime lending implosion; thus, affected the rest of the world. The Philippines in particular did not fall into a recession since the banks were not exposed to toxic assets as seen in the European banks and other developed world....   [tags: Economics ]

Better Essays
1681 words (4.8 pages)

Essay on The Crisis Of Middle East Countries

- Every now and then we are hearing a lot of crisis in the media about Middle East countries like Iran, Iraq, Saudi- Arabia, Israel, Lebanon, Qatar, Jordan, Egypt and Kuwait. One of the causes which have promoted the increased tension in Middle East is poor leadership in these countries. A leader should be a pillar of uniting the citizens who have a lot of trust in him or her to rule the country and also developing it. In contrast, leaders here don’t promote democracy in their countries leading to political, international and member’s divisions....   [tags: Middle East, Saudi Arabia, United Arab Emirates]

Better Essays
853 words (2.4 pages)

Essay on International Capital Mobility

- International Capital Mobility International Capital mobility- the free flow of investment financing from one country to another is a hot topic in the world of economics. A common question that rises when discussing this matter is, does capital mobility benefit developing countries. As with most other subjects the answers tend to vary. In this paper I will shine light on the point of view of two respectable economists concerning the positive and negative affects associated with capital mobility....   [tags: Economics]

Better Essays
1752 words (5 pages)