1.81% World Payment Share? RMB Going Nowhere

♠ Posted by Emmanuel in , at 3/31/2015 01:30:00 AM
Back out of the global top 5: the not-so-mighty RMB. So much for the inevitable internationalization of the yuan: The Society for Worldwide Interbank Financial Telecommunication (SWIFT) reports that payments denominated in renminbi fell last month from fifth to seventh place. The Chinese government has been promoting the currency far and wide an an alternative for settling international transactions--especially those with the PRC as a trade counterparty--but China has had a rougher time recently. Its role as a medium of exchange in may be falling victim to doubts over its role as a store of value. That is, folks do not...
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China Buys Europe Cheaply, Pirelli Edition

♠ Posted by Emmanuel in , at 3/30/2015 01:30:00 AM
Presumably, ChemChina will get the risque Pirelli calendar too*  [*NOTE: The IPE Zone being a family-oriented blog, pictures from the 2015 calendar aren't included here, though you can view them yourselves, of course.] The weak euro currency has meant that many things in the eurozone are dirt cheap in comparison to what they were just a year ago. It goes without saying that some of Europe's prestige brands can be had for a song, one of them being the Italian tire manufacturer Pirelli. The firm certainly needs no introduction. It has been the sole supplier of tires in Formula One for the last five years, bolstering...
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Should Korea Partner Japan for 2018 W Olympics?

♠ Posted by Emmanuel in ,, at 3/29/2015 03:00:00 AM
Korea would save $$$ partnering Japan in hosting certain events, but it probably won't. The out-of-control costs of hosting Olympic events is a well-worn trope by now. Unfortunately for South Korea, it's now its turn to feel the financial burn for the 2018 Winter Olympics in Pyeongchang. It was originally meant to promote development outside the overcrowded capital of Seoul, but like most of these Olympics, the costs are soaring and the local government officials don't know where to find the money to complete venues amid cost overruns. Actually, the IOC has become increasingly mindful of this phenomenon and recently passed...
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And Vietnam's Largest Foreign Investor is...Samsung

♠ Posted by Emmanuel in ,, at 3/27/2015 01:30:00 AM
Making mobiles for the Man in Vietnam, AKA Samsung. Unbeknownst to many, Vietnam has, in a number of respects, become the "Republic of Samsung." As labor costs in China have gone up as its development continues apace, it was inevitable that MNCs would move on to countries with relatively skilled workers and more competitive wages. Today's case in point is the Korean electronics behemoth Samsung. How reliant has Vietnam become on Samsung? The Nikkei Asia Review points out that Samsung subsidiaries are three of the four largest foreign investors in Korea; these subsidiaries account for about a fifth of all Vietnamese exports;...
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Screw the US: Developing Asia & PRC Infra Bank

♠ Posted by Emmanuel in at 3/25/2015 01:30:00 AM
Vietnam wants more of these...even if it takes Chinese support. There's an interesting story at the WSJ that emphasizes a point I wish to make regarding China and its newfangled Asian Infrastructure Investment Bank (AIIB): Nobody in the region has a particular fondness for China as a rather bullying neighbor that wishes to get its way in territorial disputes it has with nearly everyone else. That said, we are mostly poor countries that could benefit a lot from Chinese largesse. So, despite the US pressuring any and all comers to stay away, we have signed up just as the Europeans did last week. Consider the case of Vietnam,...
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Lee Kuan Yew & Singapore-Israel 'Special Relationship'

♠ Posted by Emmanuel in ,,, at 3/24/2015 01:30:00 AM
The Ultimax machine gun is proudly Made in Singapore. Today marks the end of an era as arguably the best-known Asian leader of his generation, Lee Kuan Yew--statesman, father of an independent Singapore, champion of 'Asian Values', and all-purpose pundit--has passed away aged 91. So it is that I find myself watching wall-to-wall coverage of his passing on Channel NewsAsia, which is wholly-owned by the Singaporean government through its Temasek sovereign wealth fund. Like the man himself, Channel NewsAsia is quite matter-of-fact and, er, not quite critical of Singaporean leadership under the People's Action Party. No matter;...
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Will Geezerization Cost Finland Another AAA Rating?

♠ Posted by Emmanuel in , at 3/23/2015 01:30:00 AM
The economic consequences of a top-heavy population pyramid are predictable. After dwelling on the political economy of East Asian depopulation in recent posts [1, 2], let's change the venue to Finland. Unfortunately for our Nordic friends, the dynamics of stalling population growth are equally dire. A few months ago, S&P downgraded Finland from AAA status, leaving Germany and Luxembourg as the only Eurozone members with top ratings from all three major credit rating agencies. (The others--Denmark, Norway and Sweden--still have the top rating with all three agencies but do not use the euro). Now, we have news that...
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Migration & Japan's Half-Black Miss Universe Contestant

♠ Posted by Emmanuel in , at 3/21/2015 11:41:00 AM
Beauty contest winner Ariana Miyamoto--the face of a modernizing Japan. Time for a weekend feature: a few days ago, Ariana Miyamoto from Nagasaki prefecture won the Miss Universe Japan beauty contest. As the winner, she will represent Japan at the Miss Universe competition early next year. What does this have to with IPE, you ask? You see, Ariana Miyamoto is half-black, and being of "mixed" descent is a big thing in a famously homogeneous society. For the first time ever, from Madam Noire: On March 8, Ariana Miyamoto made history by becoming the first Afro Asian to be crowned Miss Japan. And she’ll move on to represent...
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Gross US Miscalculation on PRC's Asian Infra Bank

♠ Posted by Emmanuel in , at 3/20/2015 11:28:00 AM
Obama's international economic diplomacy team is hard at work. I suppose that if I were in their place, I too would exhibit the sort of nonchalant complacency American officials have displayed before its erstwhile "allies" paid it no heed in joining China's newfangled Asian Infrastructure Investment Bank (AIIB). Fat, dumb and happy, they have been totally outmaneuvered by their Chinese counterparts despite the PRC not being exactly popular in the region since it has territorial disputes with about everyone. Perhaps for this reason the Americans thought that it would be a simple matter of discouraging involvement in China's...
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New ECB Frankfurt HQ's Literal Baptism of Fire

♠ Posted by Emmanuel in , at 3/19/2015 01:30:00 AM
A jubilant display of fireworks greets the opening of the ECB's new Franfurt digs. For an increasingly controversial organization, the ECB opening its new, EUR 1.3B headquarters in Frankfurt was never going to go down well with its critics. Namely, the European left. Having prescribed so much austerity, it doesn't sit well with protesters that relatively well-off central bankers have built such an expensive building. To no one's real surprise, its inauguration has brought a pan-European protest to the usually sleepy German town. Riots have raged as police cars have been set on fire, protesters have been roughed up, and...
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After Ending US Shale Jobs, Saudis Look to Hire 'Em

♠ Posted by Emmanuel in at 3/18/2015 01:30:00 AM
Soon they'll be leaving North Dakota for...Saudi Arabia? You've got to hand it to the Saudis: this tactic of driving down global oil prices to eliminate marginal shale producers in the United States seems to be working. There's been a non-stop drop in the number of oil rigs operating Stateside as the OPEC bigwig's decision to keep pumping despite falling oil prices has worked as intended. Being endowed with massive foreign exchange reserves, the Saudis could play a game of chicken for much longer than debt-dependent shale producers. We now know who's blinked first. But wait a minute: the plot thickens. Since there are...
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Europe Ditches US? Brits & PRC's Infrastructure Bank

♠ Posted by Emmanuel in , at 3/17/2015 01:30:00 AM
"GEORGE OSBORNE - United Kingdom": your seat is reserved at the next AIIB gathering. [See breaking news at this post's end on France, Germany and Italy also ignoring US calls for them to stay away from China's new development bank and joining it after the UK.] The premise behind the US-UK "special relationship" has always struck me as risible. Supposedly, the UK, wary of its declining global influence after the demise of its empire, has sought to remain a major player on the world stage by allying with its former colony. Sure there have been spats during the postwar era--worst among them the Suez canal fracas--but the...
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The Futility of Gov't Matchmaking in East Asia

♠ Posted by Emmanuel in , at 3/16/2015 01:30:00 AM
Love, exciting and new; come aboard, we're expecting yooouuu... For understandable reasons drawn from historical precedent, "social engineering" has largely negative connotations. However, this observation hasn't stopped any number of East Asian governments from getting involved in the process of attempting to increase birth rates. Having some of the lowest fertility rates worldwide, government planners have long since hit on the idea that bureaucrats can forestall seemingly inevitable depopulation. Since the long-term consequences of depopulation are rather dire economically, some have gone to great lengths to get "desirable"...
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Other Asians Cash In on PRC's Macau Crackdown

♠ Posted by Emmanuel in ,,, at 3/13/2015 01:30:00 AM
De Niro, Scorcese and DiCaprio: hawkers of high-end casinos in Manila. In a number of ways, the PRC authorities' crackdown on mainland officials gambling in Macau with state funds could not have come at a worse time for the special administrative region. With China slowing down anyway, fewer punters (gamblers in British-speak) are visiting Macau given stricter rules on bringing in gaming funds there from the PRC. To top it all off, so many other Asian countries are copying the Chinese playbook in opening glitzy new casinos of their own to steal business from Macau. There's been something of a bloodbath in the stocks of...
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Why Gisele Bundchen Ain't a Forex Trader

♠ Posted by Emmanuel in , at 3/12/2015 01:30:00 AM
With the Greek tragicomedy dragging down the euro to some ungodly depth, the folks over at MarketWatch are revisiting the time when the euro was at record highs against the dollar and the "in" crowd traded the greenback for the single currency. Slagging the dollar was quite fashionable way back when. Ah, 2007 brings back memories: This blog was just launched, Jay-Z and others were b*tch slappin' the US dollar, and supermodel Gisele Bundchen reportedly said that she would only accept payment for her modeling services in euros: In August 2007, as the U.S. dollar was hurtling toward record lows against the euro and Chinese...
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