Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Asian business leaders see Fed tapering as largest threat

Asian business leaders see Fed tapering as largest threat to world growth

By Pattrick Smellie in Hong Kong

Jan. 13 (BusinessDesk) – The timing and pace at which the US Federal Reserve unwinds its money-printing programme was identified as the single largest threat to global economic growth in 2014 in a vote from the floor of the Asian Financial Forum in Hong Kong.

The annual global gathering of a record 2,300 business leaders and senior government officials saw 31.7 percent of delegates voting electronically from the conference floor nominating so-called “tapering” of the US quantitative easing programme as the biggest global economic risk this year.

However, a clear majority of 52.1 percent saw potential for problems in emerging economies to be the biggest threat, following an extended period in which emerging market growth has underpinned the global economy while developed economies tackled the fallout of the 2008 global financial crisis.

That total was divided between 29.1 percent who put fear of a “hard landing” for the Chinese economy at the top of their risk list, and 23 percent who nominated the more nebulous potential for “structural issues in emerging markets” to be the biggest risk this year.

Whereas recent Asian growth had been the result of economic “tailwinds”, including quantitative easing by the US, “things are changing,” Asian Development Bank president Takehiko Nakao told the two-day conference, which opened today.

“Tailwinds are becoming headwinds,” he said, although he remained optimistic that the Eurozone would continue to recover, Chinese economic reforms would underpin its long term outlook, and that Fed tapering would be well-managed.

Global economic growth of 6 percent was estimated for last year, with 6.2 percent forecast for this year.

“Despite moderation, growth remains robust by anyone’s standards,” Nakao said. While global financial markets had gyrated earlier in 2013 at signs of early Fed tapering, moves before Christmas had seen less volatility.

“I think governments are more prepared now,” he said.

A comparatively low 16.2 percent of those who voted in the conference floor poll saw a relapse of Eurozone countries into economic crisis as the most serious threat, although in a later vote, only 54.8 percent thought Europe was now “on the right track.”

While Asian economies were expected to continue “powering global growth” and exporting capital to other markets in the year ahead, only 12.8 percent expected the Asian region to “exemplify financial and fiscal prudence.”

While there was consensus among speakers in the first sessions at the AFF that the days of double-digit annual growth in China are now a thing of the past, there was optimism that economic reforms foreshadowed late last year by newly appointed Chinese president Xi Xinping would see the powerhouse economy of Asia continue to grow sustainably over the longer term.

The AFF comes a fortnight before the World Economic Forum in Davos, Switzerland, although the chair of the Hong Kong Trade and Development Council, Jack So Chak Kwong, suggested in opening remarks that the Hong Kong forum was the more relevant gathering.

“Although Davos is good for skiing, this is where things are happening,” he said.

The secretary for financial services and the Treasury for Hong Hong, K C Chan, said the world economy was “very sensitive to US recovery.”

Asian economies were “still contingent, to some extent, by the progress of developed economies.”

The president of the Eurogroup and Finance Minister for the Netherlands, Jeroen Dijsselbloem, gave an upbeat assessment for Eurozone economies in the year ahead, as austerity programmes began to bear fruit, although European economic growth is forecast at just 1.7 percent in the year ahead, from 1 percent last year.

Another vote from the conference floor found 39.9 percent of attendees are optimistic about the world economy in 2014 and 49.3 percent took a “neutral” view, while only 10.8 percent are pessimistic about the outlook this year.

(BusinessDesk)

Disclosure: Pattrick Smellie is in Hong Kong as a guest of the Hong Kong Trade and Development Council

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news