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