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A quick look inside the Asian EconomyCédric De Kerpel
Summary
1. Introduction2. China’s influence in the world3. Yen vs. dollar4. Manufacterers confidence5. Conclusion
1. IntroductionEmerging market
China second biggest industry Japan India
Growth of GDP China 8,8 trillion dollars Japan 5 trillion dollars
1. IntroductionLarge workforces but cheap labor
cost mass production (textiles,
automotive products, electronics)
2. China’s influence in the world
Influence
◦Largest exporter, second biggest importer
◦Price setter
◦Owns a third of the world currency reserve
2. China’s influence in the world
How to use influence?Trading power
Guard and develop global trading system
Global monetary system exchange rate management Lobby with big countries
2. China’s influence in the world
Finance Create a financial system that aids
domestic and global development
Ressources Ensure that exporting countries benefit
from foreign investments
3. Yen vs. DollarJapan earthquake crisisConcerns about impact on the
global economy Yen surges shares suffer losses
3. Yen vs. DollarNew record high 76,52 Yen/USD
Yen/USD on march 17th
3. Yen vs. DollarReasons Yen surge
◦Japanese investors Repatriate cash to cover disaster costs Sell foreign assets demand for Yen rises
◦Families stocking up supplies ATM crash
This hurts the Yen
4. Manufacturers confidence
Pre – earthquake◦Manufacturers grew confident about
the economy and businessPost – earthquake
◦Manufacturers are grim about business
◦The outlook is not good◦Chance of recession?
4. Manufacturers confidence
Stocks drop, Yen risesDamage of 300 billion USDBlackouts slump production
4. Manufacturers confidence
Big companies◦Cut spending with 0,4%◦Less production
Governement will give temporary loans
5. ConclusionAsia is becoming one of the
better economiesIndustry leaderBut the Japan crisis will hurt their
short-term growth and stability