Market Mess in Japan? Too Soon to Tell

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Not surprisingly following Japan’s crazy earthquake and tsunami, the financial markets are in a sate of panic.  Finance leaders in the country are trying to calm the situation as the nuclear power crisis continued to worsen matters.  With an estimation according to Bank Credit Suisse of a loss of $171 billion, it’s no great shock that there is this panic. But the question being asked is how much do economists really need to panic?  According to Finance Minister Yoshihiko Noda said that it’s just too soon to make this kind of assessment vis-à-vis the economy.

Major Japanese Companies Close

When a country’s primary companies start to close down, there’s not likely to be a surge of confidence in the markets. Unfortunately since Friday’s travesties, Panasonic, Sony and Toyota Motor Co. have closed their production facilities.  As well, nuclear power plants have shut temporarily due to the possibility of reactors overheating.

Japan’s Biggest Crisis Since WWII

The earthquake and tsunami are being hailed as the country’s largest crisis since World War II.  Stock markets plummeted over 14 percent as the Fukushima nuclear power plant encountered two explosions. PM Naoto Kan didn’t have much to add, other than give out a warning that radioactivity levels had become ‘significantly’ higher.  This could lead to a cost of anywhere between 3 and 5 percent of output, which is extremely significant for a country that rates as the world’s third biggest economy.

Clearly Japan is going to take a long time to recover from last week’s events.  The question just remains, how much this will cost and what it will mean for the future of the country’s markets?  Only time will tell.

 

Japan’s Economy: Where to Now, with Failed Fukushima Power Plant?

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Following Japan’s “monstrous earthquake” (the largest in the region for over 1,200 years; seventh largest ever in the world), the country’s Fukushima power plant failed which has led to “fears of serious accident.”  But experts have said that there isn’t a risk to human health from the low radiation.  The crisis in Japan is no doubt escalating following Friday’s earthquake and tsunami ; a situation which isn’t being helped by the failure of another emergency cooling system at a different reactor.


Energy Fuels Japan’s Economy


Energy has always been a major source of economic sustenance for all countries.  But for Japan it is even more the case.  This is for the following reasons:  less than  half a percent of Japan’s crude oil supply is accrued from domestic sources; the country has to import more than 80 percent of all its major energy needs;  and added to this fact is the issue that Japan is home to very few domestic sources of uranium, natural gas or coal.  In spite of this, the country has managed to develop its economy into the second largest in the world.  It has managed to decrease its dependability on crude oil since the oil crises’ in the 1970s by instead using a mixture of energy resources, one of these being nuclear power.


Which Way Forward Following Tsunami


So the question that will be asked when things start to calm down a little in Japan, is what is the way forward for Japan’s economy following the impact of the tsunami and the failed Fukushima Power Plant.  It would be doubly devastating if the incredible work that has been done on bringing Japan to the forefront of global economic success were to be undone because of this crisis. Only time will tell what direction the country – and especially the economy – will be taking.

China’s Tremors Further Quake Housing Prices

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Yingjiang County encountered severe damage following an earthquake that shattered Yunnan Province in southwest China.  This resulted in the collapse of many houses, as well as seven fatalities (and perhaps more).  According to the China Earthquake Networks Center the epicenter was monitored at 24.7 degrees north latitude, 97.9 degrees east longitude.

This can’t be good news when the country is attempting (successfully right now) to reduce property prices “with sales volume already falling following purchase restrictions by local governments.”  The attempt is to make housing more affordable for the Chinese.  But with this earthquake home prices are more likely to rise again, undoing all the good work of the local governments.

Wen Jiabao’s Work for Nothing?

It makes one feel bad for the Chinese premier.  Poor Wen Jiabao has been so resilient in his efforts to “’resolutely’ press ahead with controls on the property market…reiterating a pledge to keep housing affordable.”  As well, the government has pledge to take drastic actions on any irregularities that occur in the property market vis-à-vis tax and credit policies, forcing officials to become accountable for home price maintenance.

What the country should really do is to gradually increase interest rates but this should just be one piece in the puzzle of trying to control inflation.  Inflation is also impacted by escalating worldwide prices of raw materials and this has to be accounted for as well.

Pridiyathorn To Peak Asia’s Economy?

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Asia’s economy is a bit of a mess.  Actually it's a  big mess.  And it doesn’t look like this situation is about to improve any time soon either.  Inflation looks set to continue; capital flows are extremely volatile.  But the fact that China has been trying to liberalize its currency exchange rate could be good news for economies in the region, enabling them to move away from trade settlement within the current global economic climate.  It’s a shame Pridiyathorn Devakula is somewhat removed from the political scene these days though.  Thailand’s previous Deputy Prime Minister is quite well-to-do these days.  His wife has a staggering Bt258 million to enjoy while their daughter isn’t too badly off either at Bt7 million.  Perhaps if the family shares some of its wealth it can pull the region out of its financial hole.

Yuan Goes International

But even if the Devakula family decides to keep their wealth to themselves (giving them near-billionaire status), the yuan need not suffer.  It seems like the government of China is moving toward the possibility of internationalizing this currency alongside the Euro and the dollar.  As well, plans are set for Hong Kong to become the traing center for yuan-denominated assets enabling foreign companies to “issue yuan-denominated assets in Hong Kong” which will also mean the Bank of China NY branch will be able to open yuan deposits.  The hope is that investment abroad will increase too.  As well, if they adopt Devakula’s idea of “co-operation among regional economies” to establish a benchmark currency, then the region’s economy could potentially peak.

Naota Kan to Celebrate International Women’s Day?

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Although he may be struggling to win popularity in his cabinet, Naota Kan might have some fans from the fairer sex and might even be stealthily celebrating International Women’s Day today.  Following his university graduation, Kan was a staff member for Fusae Ichikawa’s campaign, a woman’s rights activist.  But unfortunately, this isn’t exactly helping his case today.  When things are already looking somewhat bleak for the guy, his cabinet is facing further instability leading commentators to conclude that his “days as prime minister are numbered.”

Kan’s Cabinet Crashes

Seiji Maehara resigned for taking illegal donations from a Korean national which also brought to the forefront discussions about Japan’s diplomacy.  This doesn’t look good for Kan as Prime Minister or for the stability of the Democratic Party of Japan (DPJ) either.  The resignation of three cabinet ministers cannot be good for anyone.


So perhaps Kan should step down gracefully and go do something else in the non-profit world instead…like celebrating the women in his country by fighting their corner.  Who knows?  The fairer sex just might not be so harsh on him.

India’s Booming Economy Doesn’t Reflect Its Women

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While the economy in India goes from strength to strength with the trend set to continue, it seems the women of the country feel there is little to celebrate.  Indian finance officials predicted that if the economy “sustains a nine per cent GDP growth” in the next decade, the economy is likely to reach a staggering $ six trillion.  If this is the case, why do the women feel there is nothing to celebrate alongside their sisters on International Women’s Day on March 8?  Most are unaware of the date and its significance (which began in 1910 at a conference to change women’s difficult work conditions, leading to the UN declaration in 1977 of this date being the International Day for Women’s Rights and International Peace).  Indeed, one Indian school teacher commented, “International Women’s Day makes no difference to me. I go to school, and I get back home to do my chores.”  For her – like many other women in India – no matter how the country is advancing – at the end of the day she still needs to work her fingers to the bone to keep everything on track. 


Women’s Plight “Dismal”


It seems there is little for the women of India to celebrate.  Content writer at PlaNET Surf Smriti K thus pointed out that “it makes no sense to celebrate such days when there is no real difference to the plight of ordinary women.”  This seems like such a shame since they should be benefiting from how the Indian economy is set to grow to nearly $1.8 trillion in the next two or three years.  If this really happens then it will result in the country becoming a world power, but if the women are still suffering and their plight is really so dismal, then the extreme disparity in the country cannot be good.
Perhaps if the women could find ways to celebrate International Women’s Day and to be more assertive and fight for more rights then they too could benefit from the country’s successfully developing economy.  When that happens, the whole country can start to enjoy the fruits of their labor.
 

What Would King George VI Have Said About Singapore’s Rice Crisis?

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Pest storms are devastating rice production in Singapore, which is no good for anyone since this grain is a staple throughout Asia.  This is becoming a threat to the country’s food security and could completely destroy rice farms throughout the region, according to Singapore scientists.  Indeed, there is talk that the pesticides used to counter this problem may be doing the opposite – making it worse.  The problem has partly been caused by trying to go cheap:  use of less expensive pesticides; poor farmer education and destruction of ecosystems around paddies, to name but a few.

Historically this wouldn’t have been the case.  Farmers took immense pride in their plots and ensured their produce was protected.  King George VI would have been ashamed at his Asian brethren and might not have so readily agreed to having his face emblazoned on a set of Singapore stamps issued in 1948.

 

 

Mid-East Flare Up Leaves Korea a Mess

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While China’s economy and finance markets are looking bold and strong, its Korean neighbor isn’t faring quite so well.  The potential of the Middle Eastern mess is once again being blamed for the success and stagnation of the yuan and the won.  Indeed, statistics showed a hit of 345.35 billion yuan (probably supported by short- and medium-term bonds).  Meanwhile in North Korea the “dire economic situation” is so extreme that international food aid calls (which have likely lessened due to missile and nuclear programs) are becoming increasingly louder, apparently to no avail.  On the one hand the country was blaming international pressure for their failure while simultaneously asking the world for charitable handouts.  Despite its attractive-looking economy, China has not been dealing with the Middle Eastern mess so well, and instead psychologically ignoring its very existence, or running into a panic at the thought of what might entail.

China’s Success Mimics Korea’s Failure

So while the Chinese economy is going from strength to strength, the same can’t be said for Korea.  This hasn’t always been the case.  At one time, it was reported that South Korea was providing around 400,000 tons of rice each year to North Korea but once relations between the two started depleting around three years ago, this gift ended too.

Looking towards China though, things couldn’t be brighter.  It seems that Yujiapu is set to be home to “the world’s largest financial zone a decade from now.”  A set of twelve buildings are to be constructed marking just the “first phase” in this new financial world headquarter, really putting the rest of the region to shame.  While their brothers in North Korea are looking for bread and water, the Chinese are enjoying festive banqueting.


 

South Korea Smart Grid Investment

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A nationwide smart grid is to be built by 2030, receiving a staggering $7.18 billion investment from South Korea’s state-run Korea Electric Power Corp (KEPCO), in an attempt to “curb the country's carbon emissions and improve efficiency in its electricity market.”  There have been various greening efforts in South Korea such as 131-acre rooftop gardens; electric scooters for local police etc.
Ultimately the smart grid will provide for more efficient power distribution and maintenance.  Consumers are able to participate in a more active role to determine power usage via home appliance monitoring and direct grid feedback.
 

Taiwanese Investment News

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Good news for Taiwanese investors follows the recent announcement from Taiwan’s Ministry of Economic Affairs that Taiwan will be opening up its technical sector (that until now had been extremely closed) to Chinese investment (which will begin slow).  This comes simultaneous to relations between China and Taiwan that are “steadily improving.”  As well, it is in sync with the work Ma Ying-jeou (Taiwan’s President) has been doing to “bolster the island’s economy” with help from the Chinese.  Part of this is buying products from Taiwan.