Latest news with #FactoryAsia
Bangkok Post
04-08-2025
- Politics
- Bangkok Post
Conflict undermines cooperation
The long-standing border dispute between Cambodia and Thailand has again escalated to actual conflict. Dozens of people have been killed, more have been injured, and more than 170,000 people have had to flee their homes. Cross-border trade and tourism are on hold. As I write this piece, a fragile ceasefire is still in place, but we need more than this; we need an end to hostilities between the two countries. Let me be clear, there is no treasure chest to be won here. The land in dispute has little intrinsic value. The most sensitive issue is the ownership of relatively small pieces of land that contain the ruins of two Hindu temples. I am sure I am not the only person to wonder what the priests who served the temples would think of their ruins being the centrepiece of armed conflict. The broader issue is that, in today's world, we increasingly face problems that can only be solved through collective action. This was not so true even a few decades ago. Then, South Korea, Taiwan, or Singapore could, with the right mix of policies, invite investors to build manufacturing or assembly centres that would produce consumer goods for Western markets, paying good wages. Factory Asia required considerable work on the part of the governments, but not necessarily the cooperation of their neighbours. Today, there is still room to join Factory Asia; however, emerging problems will make development harder, problems that require worldwide, coordinated action. Climate change is one such challenge. Without a collective shift in our behaviour and a globally coordinated effort, we will continue to suffer from heatwaves, more intense storms, and higher sea levels, which will degrade seaports and coastal agricultural areas. We will only turn back this present danger if we have global cooperation on an unprecedented scale. Conflict of the type seen at the border of Cambodia and Thailand will inhibit public collaboration between the two countries, weakening Southeast Asia's voice in any global effort. Climate change is only one of the problems we face that requires an international effort to solve. Across Southeast Asia, fish stocks are collapsing. This imperils the food security of many people in the region. But, as is often said, fish do not need passports; they travel from one part of the oceans to another, and without a general agreement to reduce overfishing, the stocks will not recover. Hostile relations between any of the countries in Southeast Asia will make any effort to address this much harder. I'm sure every reader has a list of problems they worry about, such as a new pandemic. Some of these will demand a coordinated multi-country effort. It is possible to have this. In an earlier dustup between Cambodia and Thailand, in 2009, as a Director for the Asian Development Bank (ADB), I was privileged to chair a meeting in Bangkok of the transport sector of the Greater Mekong Subregion (GMS) programme. This initiative brings together the governments of mainland Southeast Asia, including Cambodia, Lao PDR, Myanmar, and Thailand, as well as China, which participates through Yunnan Province and the Guangxi Zhuang Autonomous Region. These governments have come together to jointly plan and carry out cross-border projects that enhance the potential for sustainable development. Transportation is a key element, especially for the interior areas of these countries. Without access to the coast, the people of these areas are unable to participate in the international trade that has driven regional development. Cross-border road systems enable trucks to transport goods from factories to ports in neighbouring countries. At the local level, improved roads ease travel to markets, schools, and health facilities. At the time of the Bangkok meeting, the GMS had mobilised roughly $10 billion (324.7 billion baht) to fund transportation projects. The government officials had gathered to consider how to move forward in the sector. As the teams reviewed project proposals, news arrived of a fight at the border between Cambodia and Thailand. We understood that at least one person had died and many were injured. I watched as the teams agonised over whether they could continue collaborating. Fairly quickly, however, the decision was made by all to continue. It was explained to me that, although the relationship between the two countries was strained, the officials at our meeting had been tasked with working together. They understood that the quality of life and the livelihoods of literally millions of people in the region depended on improved transport, something that could not occur without meaningful collaboration. This decision required political courage, and I don't know if even the most dedicated official could have sustained that position if the effort had needed more than a few days and had been more in the public eye. Unfortunately, the problems that face the countries of Southeast Asia, indeed the problems that face the global community, will require both sustained and very public cooperation. The ceasefire in place is welcome, but it should be viewed as a first step towards building a relationship that will enable Cambodia and Thailand to collaborate meaningfully in addressing the broader problems that face us.
Yahoo
04-04-2025
- Business
- Yahoo
Business Lookahead: This is going to hurt
STORY: From the market turmoil over Trump's tariffs to Chinese inflation data, these are the stories to watch in business and finance in the coming week. :: Lookahead :: Trump's tariffs :: April 2, 2025 U.S. President Donald Trump's hefty tariffs on major trading partners has plunged markets into turmoil. That's panicked investors who are now looking for safe havens amid fears a U.S. recession could happen. Global markets have felt the impact of Trump's "Liberation Day" and are now bracing for retaliation. For market watchers, it's pretty straightforward - the stronger the retaliation to U.S. tariffs, the higher the chances the world economy lurches into recession and keeps investors away from risk assets. :: 'Factory Asia' takes a hit 'Factory Asia' has taken a particularly large hit from Trump's tariffs. Six of the nine Southeast Asian countries on Trump's list face tariffs over 30%. Investors expect Asia's central banks to counter the hit. But it's trickier for Sri Lanka. The U.S. typically takes around 40% of its apparel exports, which brought in a net $1.9 billion last year - its second-biggest source of foreign currency. :: Earnings on deck A crucial quarterly reporting season for U.S. companies kicks off in the coming week, led by results from several major banks. JPMorgan, Wells Fargo and Morgan Stanley are among those reporting on April 11. Delta Air Lines and Corona beer maker Constellation brands also post results. Focus will also be on the consumer price index report for March, due April 10. :: Some relief? Chinese inflation data is due on Thursday. The figures come on the heels of China's State Council's "special action plan" reveal last month. While recent economic data in the country has turned more favorable and Chinese stocks continue to find more buyers, persistent deflationary pressures remain a huge drag. Trump's tariffs are also complicating matters. Sign in to access your portfolio
Reuters
03-04-2025
- Business
- Reuters
Emerging economies brace for Trump tariff 'turning point'
Summary 'Factory Asia' hardest hit by tariffs Vietnam stocks, Sri Lanka debt, Asian currencies tumble JPMorgan lowers EM FX, warns of enduring 'shock to sentiment' 'Gravitational shift' in global trade and investment SINGAPORE/LONDON, April 3 (Reuters) - Emerging economies worldwide are bracing for sliding currencies and a possible deterioration of their sovereign credit after U.S. President Donald Trump's tariffs brought levies on U.S. imports to their highest levels in 100 years. The worse-than-expected tariff blitz hits Asia -- and some of the world's poorest nations -- the hardest. It could mark a negative turning point for emerging market debt just as many nations had hoped to lure investments after years of risk aversion. "We are immediately concerned by the potential impact of the severe tariffs imposed on a range of emerging economies — an approach which risks further damaging the development prospects of countries already facing worsening terms of trade," said John Denton, Secretary-General of the International Chamber of Commerce. He added that the shifts could cause a cascade of sovereign rating downgrades. Trump unveiled the sweeping set of penalties as high as 50% on allies and antagonists alike, roiling financial markets and stoking fears of a global trade war. The tariffs, which add to existing levies, will hit everything from Madagascar's vanilla, at 47%, to Sri Lanka's textiles at 44%. "The shock to sentiment and capital flows is likely to endure and requires higher risk premia," investment bank JPMorgan said in a note, downgrading its stance on emerging market currencies to "underweight" and calling a possible turning point for emerging market debt. Emerging markets had only last year started to reverse a decade-long deterioration in credit ratings following a wave of defaults, which was accelerated by the fallout from COVID-19 and was a key driver of rising borrowing costs. U.S. investment bank Goldman Sachs said tariffs would add a 1 percentage point drag to GDP growth in China, the world's second-largest economy, which could have a knock-on effect on wider emerging markets. The International Chamber of Commerce's Denton likened the impact to the devastating 1970s energy crisis, which hit the global economy and roiled a swath of emerging market assets. Some investors said tariffs could fundamentally shift how they approach emerging market bets. "If the tariffs remain as it is, we definitely need to think about the structural, export-oriented growth story for EM," said Gary Tan, a portfolio manager at Allspring Global Investments. "If this model is broken, then definitely we have to reconsider how, basically, you invest in EM for growth." DEEP IMPACT AT 'FACTORY ASIA' Asian economies bore the brunt of the penalties; six of the nine Southeast Asian countries on Trump's list were hit by tariffs between 32% and 49%. Citi said the tariffs hit 'Factory Asia' particularly hard, estimating the weighted average U.S. tariffs increased by 21%, but Southeast Asia and China took 34%, compared with Europe's 20% and little in Latin America beyond 10%. Market moves mirrored those concerns. Vietnam stocks tumbled nearly 7%, their steepest daily decline in at least four years, its dong currency sank to a record low and the Thai baht slipped to a more than three months low. Sri Lanka's sovereign dollar bonds slid more than 3 cents, to their lowest levels since last year's debt restructuring. Fred Neumann, chief Asia economist at HSBC, said he expected central bank policy makers from China, Taiwan, Malaysia and elsewhere in Asia to step in with rate cuts. "This is likely to amount to a significant growth shock for the region including Southeast Asia," said Neumann. "That would mean that central banks will likely prioritize growth over inflation concerns." International Monetary Fund Managing Director Kristalina Georgieva had warned on Monday that many countries had exhausted their fiscal and monetary space during COVID, leaving them with high debt and limited ability to cushion future shocks. International investors have less exposure to some of the poorest countries, such as Cambodia and Bangladesh, but their 49% and 37% reciprocal tariffs, respectively, will sting the countries. Cambodia sent more than 40% of its exports to the United States in 2022, according to the World Bank. Latin America and many African nations emerged with comparatively lower tariffs; Kenya on Thursday said its 10% tariff would give it a "competitive advantage" in textile exports compared with the harder-hit competitors such as Vietnam, Sri Lanka and Pakistan. But investors cautioned that it was far from clear how lasting the measures would be - or the secondary effects of a shift in global trade that is unprecedented in the modern era. "We haven't seen these large gravitational shifts in 80 years," said Yvette Babb, portfolio manager at William Blair. "The question is, how structural is it? It's fairly unprecedented, what we're seeing, in terms of what the U.S. president is embarking on, but how much of it is going to stick?"
