Asia's top 5 financial trends
Towards the end of 2008, the major economies of the West began to falter, and by the turn of the year, recession had started to bite. While this was particularly pronounced in Europe, the key players on the Asian economic stage – China, Japan and India – managed to maintain a relatively even keel. However, just as the European economies are starting a sluggish fight back towards healthier market conditions, the impact of those previous years of fiscal uncertainty has at last been having an impact in the East.
Asian money is tightening, with credit agencies putting the squeeze on personal and commercial finance. The scale of economic growth, which had previously enjoyed considerable periods of stability, has slumped to moderate levels. Property prices are tumbling.
For all that, the Asian economy still represents one of the true growth regions in the globe. The International Monetary Fund
and Asian Development Bank
still forecast a GDP standing at around seven percent. As well as this, here are the five other main trends forecast to be affecting Asian economies:-
1. Property Prices will continue to fall, although there is unlikely to be a decline as sharp as the US markets experienced. Inflation tempering in China will cause their property market to be less buoyant than 2011.
2. Global acquisitions Asian companies will continue to expand into global markets. The power of the yen will inevitably lead to Japan leading the eastern pack. In 2011 that country became the region's largest acquirer of foreign assets. As hundreds of trillions of Japanese yen become valued at their highest levels to the dollar since 1945, this spending spree is likely to continue.
3. Yuan conversion China will be trying to ensure that the yuan becomes a convertible currency. The recent trend of Hong Kong companies raising collateral by issuing debt in yuan (as an attempt to fund expansions into markets in the People's Republic) will continue unabated. Around the world central banks may well start incorporating the Chinese yuan as an important component of their foreign-exchange reserves.
4. Hiring employees Although there will be redundancies throughout Europe and the US as part of budget tightening, Asian companies look set to buck this trend. In fact, recent market research has gone as far as to anticipate workforce expansions of more than 5 percent.
5. Credit tightening Asian banks will tighten their lending criteria in order to curb excessive financing. This will have a knock-on effect with small businesses, curtailing their ability to raise capital. Beijing's has been trying to counter the need for such drastic control by stimulating their economy through tax cuts for small businesses and increasing public service spending.