|By Business Wire||
|May 20, 2014 07:01 PM EDT||
The ASEAN region is more vulnerable to a China hard landing than the US and EU, according to new analysis released at the World Economic Forum in Manila from economists at IHS Inc., (NYSE: IHS), the leading global source of critical information and insight. The risk of a China hard landing will also be discussed at the IHS Forum in Singapore from 10-12 June.
“A hard landing in the Chinese economy is one of the key risks facing the global economy in 2014-15 and our economic model shows that there is a one in three risk of this scenario happening in the next three years,” Rajiv Biswas, Asia Pacific chief economist for IHS, said speaking from Manila.
Using the state of the art IHS “Global Link” model, IHS found that a Chinese hard landing scenario would lower world GDP growth by 0.1 percentage point in 2014 and 0.5 percentage point in both 2015 and 2016.
Japan’s real GDP would be 1.1 percent lower by 2018, while Australia’s real GDP would be down 2.2 percent. By the end of 2016, the level of world GDP is 1.2 percent lower than had China not experienced a hard landing.
ASEAN region particularly vulnerable
“ASEAN as a region is particularly vulnerable to a China hard landing scenario due to the rapid growth in bilateral trade and investment with China over the last decade,” Biswas said.
“ASEAN exports to China have grown at an average pace of 20 per cent per year over the last decade. That has helped cushion ASEAN from weak growth in the key export markets of the US and EU during the global financial crisis, but it has also created greater vulnerability to a China hard landing,” he said.
Significant impact on Malaysia and Indonesia
The impact on the Malaysian economy would be significant, as exports account for a high share of the country’s total GDP, and China is its largest export market. In the China hard landing scenario, Malaysian real GDP is 3.7 per cent lower than the baseline case by 2018.
Indonesia would also suffer some transmission shocks due to the impact of weaker Chinese demand for commodities as well as adverse terms of trade effects due to declines in world commodity prices. Indonesian GDP growth would be down 1.8 per cent by 2018 compared with the baseline case.
Manufacturing supply chain vulnerable to shocks
“ASEAN nations are increasingly integrated into the East Asian manufacturing supply chain, and manufacturing sectors would be hit by shock waves from the impact of a China hard landing on Chinese consumer demand,” Biswas said. “Asian commodity exporters would also suffer from a slump in Chinese demand for commodities, which would also push commodity prices lower.”
Price of coffee, oil and copper among commodities affected
Prices for several commodities would fall in the China hard landing scenario. Comparing the scenario with the IHS baseline forecast, aluminum prices would be 2.1 per cent lower in 2014 and 13.5 per cent lower in 2015; copper prices would be 2.2 per cent lower in 2014, but 16.8 per cent lower in 2015; and iron ore is expected to be 7.4 per cent lower in 2014 and 29.7 per cent lower in 2015. Prices for cotton, coffee, and, to a lesser extent, wheat would also be affected.
A China hard landing would have direct implications on oil prices and oil exports to China, with world oil prices expected to be about $10 per barrel lower on average in 2015 than in the base case.
Emerging market exchange rates affected
Asian emerging market exchange rates would also be affected. Because several emerging markets are highly dependent on China as an export market, and due to risk aversion in global financial markets due to a China hard landing, global financial investors would back away from riskier emerging markets. This puts pressure on some emerging market currencies and causes some countries to raise interest rates to prevent further capital outflows.
The net result of a China hard landing is a weaker growth path worldwide over the next three to four years, with the most severe transmission effects being to other economies in the Asia-Pacific.
China hard landing scenario assumptions and background
The IHS China hard landing scenario assumes a severe tightening of credit conditions, a crash of the housing market and default by major real estate developers, and also assumes a drop in confidence by domestic and international investors.
This is followed by cutbacks in fixed investment and consumption, a slowing of real exports of goods and services, and significant erosion in domestic demand, causing China to experience deflation in 2015. Rather than holding near 7.5 per cent as expected in the IHS central case forecast for the Chinese economy, China’s real GDP growth downshifts to 6.6 per cent this year and 4.8 per cent in 2015 in the hard landing scenario, before gradually reviving.
While the impacts by country and region vary significantly, the scenario developed using a new, state-of-the-art IHS “Global Link” model of the world economy, has a one in three probability of occurring.
About the IHS Global Link Model
The IHS “Global Link” model is the most comprehensive global macroeconomic model commercially available. It covers 68 countries - 95 per cent of global GDP - that are linked with financial flows, trade flows and key commodity prices to give a complete view of the direction of economy. The model incorporates macroeconomic indicators and key sectoral and commodity price data from IHS practices specializing in trade, energy, commodities, consumer markets and risk.
IHS Forum Singapore 10-12 June: Complimentary press passes
The IHS China hard landing scenario will be a topic for discussion at the IHS Forum Singapore on 10-12 June 2014.
Members of the press can now register for a complimentary pass to the IHS Forum in Singapore, held at the Swissôtel The Stamford, 2 Stamford Road, Singapore. To register, please send an email with your name, title and outlet details to [email protected].
A full agenda and additional information can be found: http://ihsglobalevents.com/forum/singapore2014/
A media work room and TV floor space will be provided as well as access to key speakers such as IHS Asia Pacific Economist Rajiv Biswas other IHS experts.
About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs more than 8,000 people in 31 countries around the world.
IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. © 2014 IHS Inc. All rights reserved.
CIOs and those charged with running IT Operations are challenged to deliver secure, audited, and reliable compute environments for the applications and data for the business. Behind the scenes these tasks are often accomplished by following onerous time-consuming processes and often the management of these environments and processes will be outsourced to multiple IT service providers. In addition, the division of work is often siloed into traditional "towers" that are not well integrated for cro...
Feb. 11, 2016 08:00 AM EST Reads: 480
Advances in technology and ubiquitous connectivity have made the utilization of a dispersed workforce more common. Whether that remote team is located across the street or country, management styles/ approaches will have to be adjusted to accommodate this new dynamic. In his session at 17th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., focused on the challenges of managing remote teams, providing real-world examples that demonstrate what works and what do...
Feb. 11, 2016 07:00 AM EST Reads: 302
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
Feb. 11, 2016 06:45 AM EST Reads: 441
Silver Spring Networks, Inc. (NYSE: SSNI) extended its Internet of Things technology platform with performance enhancements to Gen5 – its fifth generation critical infrastructure networking platform. Already delivering nearly 23 million devices on five continents as one of the leading networking providers in the market, Silver Spring announced it is doubling the maximum speed of its Gen5 network to up to 2.4 Mbps, increasing computational performance by 10x, supporting simultaneous mesh communic...
Feb. 11, 2016 05:00 AM EST
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, will discuss using predictive analytics to ...
Feb. 11, 2016 02:45 AM EST Reads: 397
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, will discuss how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved effi...
Feb. 11, 2016 02:30 AM EST Reads: 255
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
Feb. 11, 2016 01:15 AM EST Reads: 209
Father business cycles and digital consumers are forcing enterprises to respond faster to customer needs and competitive demands. Successful integration of DevOps and Agile development will be key for business success in today’s digital economy. In his session at DevOps Summit, Pradeep Prabhu, Co-Founder & CEO of Cloudmunch, covered the critical practices that enterprises should consider to seamlessly integrate Agile and DevOps processes, barriers to implementing this in the enterprise, and pr...
Feb. 11, 2016 01:00 AM EST Reads: 408
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
Feb. 11, 2016 01:00 AM EST Reads: 224
Sensors and effectors of IoT are solving problems in new ways, but small businesses have been slow to join the quantified world. They’ll need information from IoT using applications as varied as the businesses themselves. In his session at @ThingsExpo, Roger Meike, Distinguished Engineer, Director of Technology Innovation at Intuit, showed how IoT manufacturers can use open standards, public APIs and custom apps to enable the Quantified Small Business. He used a Raspberry Pi to connect sensors...
Feb. 11, 2016 12:45 AM EST Reads: 254
The principles behind DevOps are not new - for decades people have been automating system administration and decreasing the time to deploy apps and perform other management tasks. However, only recently did we see the tools and the will necessary to share the benefits and power of automation with a wider circle of people. In his session at DevOps Summit, Bernard Sanders, Chief Technology Officer at CloudBolt Software, explored the latest tools including Puppet, Chef, Docker, and CMPs needed to...
Feb. 11, 2016 12:30 AM EST Reads: 329
Data-as-a-Service is the complete package for the transformation of raw data into meaningful data assets and the delivery of those data assets. In her session at 18th Cloud Expo, Lakshmi Randall, an industry expert, analyst and strategist, will address: What is DaaS (Data-as-a-Service)? Challenges addressed by DaaS Vendors that are enabling DaaS Architecture options for DaaS
Feb. 10, 2016 11:45 PM EST Reads: 352
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
Feb. 10, 2016 11:45 PM EST Reads: 113
DevOps is not just last year’s buzzword. Companies with DevOps practices are 2.5x more likely to exceed profitability, market share, and productivity goals. But how do you enable high performance? What can you do right now to start? Find out from DevOps experts including Gene Kim, co-author of "The Phoenix Project," and the Dynatrace Center of Excellence.
Feb. 10, 2016 09:15 PM EST
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
Feb. 10, 2016 09:00 PM EST