Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Asia House Advisory takes a look at the top developments in Asia this week affecting trade, investment and public policy.
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FRIDAY 11 JUNE 2021
The 47th G7 summit is taking place between 11-13 June in the Cornish town of Carbis Bay – the first G7 summit to take place since 2019 following the onset of the pandemic. Funding for climate change commitments and the effective management of surplus COVID-19 vaccines will be high on the agenda. US President Joe Biden is set to announce a global COVID-19 vaccine strategy while also looking to bolster US relations with fellow G7 members. Of particular importance will be further developments relating to the G7 tax proposal for global corporations and the particular application of the 15 per cent global minimum tax.
A joint research and development initiative between Japanese and Finnish industries on 6G advancement was announced at the Global Digital Summit hosted by Nikkei and Japan’s Ministry of Internal Affairs and Communications on 7-8 June. Key signatories include Japan’s Beyond 5G Promotion Consortium and Finnish-based 6G Flagship. Members of the Japanese Consortium (which includes Nippon, NTT Docomo, KDDI, University of Tokyo, SoftBank Corp, and Rakuten Mobile) are set to contribute to the initiative’s research and engage in information sharing with Finnish companies, such as Nokia.
Kono Taro, Minister for Administrative Reform, Japan, will brief Asia House Corporate Members on 18 June, on Japan’s economic prospects, its vaccine rollout and its digital transformation. Find out more.
China’s National People’s Congress (NPC) passed a law on 10 June that aims to counter foreign sanctions. While full details of the law have not yet been made available, it comes as the US and a growing list of other countries have imposed sanctions against China. In light of the new law, and the uncertainty around its details, foreign companies could have increased concern regarding investment prospects.
Dr Wang Huiyao, Founder and President of the Center for China and Globalization, will discuss opportunities for deepened cooperation between China and its partners in Europe and North America at a briefing for Asia House Corporate Members on 22 June. Find out more.
Bank of Japan data released on 10 June revealed that corporate goods prices rose 4.5 per cent on an annual basis in May 2021 – marking the most significant year-on-year increase since September 2008. The latest data could raise concerns around inflation pressures and comes as global inflation data continue to surprise to the upside.
Indonesia Investment Authority (INA) announced on 10 June that it is in the process of negotiating an investment deal fostering the development of domestic digital infrastructure within its tech sector. Notably, this initiative falls under the government’s strategic drive to bolster the country’s economic growth by attracting greater amounts of inward investment. This includes a target of securing US$20 billion worth of assets to INA – as it stands, the INA holds US$5 billion worth of assets via government funding.
Iranian Presidential Elections on Friday 18 June: The current Chief Justice of Iran, Ebrahim Raisi, is tipped to win the upcoming election; polls have shown low turnout is likely amid voter dissatisfaction, due in part to the Guardian Council’s disqualification of several candidates.
US Federal Reserve Meeting, 15-16 June: The meeting will be of particular importance in signalling the degree to which the Federal Open Market Committee (FOMC) is discussing the scaling back the pace of its asset purchases. This has been foreshadowed, in part, by the FOMC meeting minutes.
INDIA: The UK has stated that the Indian variant of the COVID-19 virus is now believed to be up to 60 per cent more transmissible than other strains; 3,000 junior doctors in India’s Madhya Pradesh state resigned on 3 June after the demand for a 24 per cent wage increase was not met.
SOUTH KOREA: The government has said that it is on track to meet its national vaccination target ahead of schedule during the first half of 2021.
INDONESIA: The Hajj pilgrimage has been cancelled for the second year in a row amid concerns over another surge in COVID-19 infections; China’s Foreign Minister, Wang Yi, has stated that the country intends to strengthen its cooperation with Indonesia to jointly produce COVID-19 vaccines.
THAILAND: Thailand’s much anticipated national vaccination drive was launched on Monday 7 June. A total of six million locally produced Astra-Zeneca vaccines and imported Sinovac vaccines are set to be administered during the month of June.
These COVID-19 insights are taken from Asia House Advisory’s focused monitoring service, one of the ways in which Asia House is providing analysis on economic and public health policy measures taken by governments across Asia and the Middle East. Please contact advisory@asiahouse.co.uk for further details on this and our other advisory services.
FRIDAY 4 JUNE 2021
On Monday, China’s central bank announced that it will increase the FX reserve requirement ratio for domestic financial institutions from five to seven per cent, effective from June 15. According to the People’s Bank of China, this was ‘in order to strengthen foreign exchange liquidity management’. The increase constitutes the most significant increase by China in statutory reserve requirements since the 2008 global financial crisis.
The UK’s proposed accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came a step closer this week, when all 11 member nations agreed to accession negotiations. The UK formally applied to join the trading bloc in February as part of its post-Brexit strategy to deepen trade relations with markets across the Asia-Pacific region. The UK’s entry to the CPTPP would remove existing tariffs on 95 per cent of goods with members. Talks are scheduled to commence over the coming weeks.
Recently released data from India’s Statistics Ministry shows that the country’s economy expanded by 1.6 per cent in the first quarter of 2021 when compared with the same period in 2020. The data indicates that growth was driven by the manufacturing sector, domestic demand, and state spending. India continues to struggle to control the COVID-19 crisis, with daily case numbers at around 200,000. Economic growth could be at risk given uncertainty around the length of the second wave. A number of global credit rating agencies, including Moody’s Investor Service, have lowered their growth forecasts given these risks.
On June 1, new laws came into effect allowing foreign investors to hold a 100 per cent stake in companies throughout the UAE (except for strategic sectors such as oil, gas, and defence). Previously, full foreign ownership was only permitted within the UAE’s freezones and select sectors. Otherwise, foreign investors could only own a maximum 49 per cent stake in a business, with the majority stake being held by a local Emirati partner. The liberalisation is designed to encourage inward investment into the UAE as the country recovers from the COVID-19 crisis, Dubai Media Office stated that since the announcement, 59 foreign investors had taken steps to utilise the new law. HE Mansoor Abulhoul, UAE Ambassador to the UK, will discuss this and other recent initiatives to attract foreign investment into the UAE when he briefs Asia House Corporate Members on 10 June. Find out more
Israel’s longest-serving Prime Minister, Benjamin Netanyahu, could soon be out of power following an agreement between a several opposition parties. Following two months of negotiations after Israel’s inconclusive election on 23 March, Yair Lapid, from the centrist Yesh Atid party, has brokered an opposition coalition that includes unlikely partners, such as the pro-settlement and nationalist Yamina party, led by Naftali Bennett, and the Islamist Ra’am party. Under the agreement’s, Bennet would be Prime Minister until 2023, before handing over power to Lapid. The government-in-waiting must be approved by a majority in the Knesset with a vote is expected over the coming days. The opposition bloc holds a slender majority of 61 within the 120 Knesset members suggesting that Netanyahu remaining in power may depend on defections. A failure to form a new government will prompt Israel’s fifth election in just over two years.
The heads of the G7 nations and EU representatives will meet between 11-13 June: The 47th Leaders summit is hosted by the UK; the agenda will likely address the pandemic, vaccine rollouts and climate change.
An APEC meeting for Ministers Responsible for Trade (MRT) will take place on 5 June: It marks the first ministerial session and is set to focus on how trade can facilitate recovery from COVID-19; accelerated access to vaccines via improved trade procedures is a possible outcome of the talks.
HONG KONG: Following a period of slowing vaccine uptake amid public hesitancy over safety, numbers of inoculations have surged over the past week after a group of property tycoons announced a lottery for residents aged 18 and over who had received both doses of their COVID-19 vaccine.
INDIA: An anti-body treatment used for patients suffering mild to moderate symptoms of COVID-19 has been given emergency use approval; made by Eli Lilly and Company, the drug will be an additional resource for India as it continues to tackle the current wave of COVID-19 cases.
AUSTRALIA: An Australian court has rejected a challenge to the federal government’s ban against its citizens leaving Australia; Victoria state announces a seven-day lockdown between 27 May and 3 June.
THAILAND: The government has unveiled a stimulus package worth US$4.5 billion in a sign of bolstered efforts to address the economic impact of the COVID-19 pandemic; the Finance Ministry stated that the stimulus package would be aimed at providing relief for those worst affected by the pandemic, while also supporting domestic growth.
These COVID-19 insights are taken from Asia House Advisory’s focused monitoring service, one of the ways in which Asia House is providing analysis on economic and public health policy measures taken by governments across Asia and the Middle East. Please contact advisory@asiahouse.co.uk for further details on this and our other advisory services.
Join our mailing list to receive The Week in Asia direct to your inbox every Friday.
