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Secretary of State Hillary Clinton says some senior Burmese officials and parliamentarians will now be allowed to visit the United States and that Washington will lift its ban on the export to Burma of U.S. financial services and investment to help accelerate modernization and reform.

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US lifts travel ban on Burmese officials

Domestic demand has also shown signs of life, but the severe weather, the withdrawal of consumption-based fiscal stimulus and political uncertainty should be a drag on growth. With a large fraction of the population still occupied in agriculture or working in rural areas, agriculture is a critical variable for the performance of household consumption.
Policies that could contribute to reducing Thailand’s dependence on foreign demand include a phased liberalization of the services sector, boosting transport infrastructure, a reform of educational curricula and improved access and quality of higher education to boost skills of the labor force, better integration of universities, firms and government, and improved social safety nets

‘‘In part, the gains in the market are a function of wealth creation. Asian and Middle Eastern household wealth is growing faster than in the United States and Europe,’’. The broadening and deepening of the Asian capital markets has helped draw savings away from traditional asset classes such as bank deposits and mutual funds to equities.
The TSRs for the two groups are similar.

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First Budget Store to Open after Songkran

At the end of 2009, real GDP was back at pre-crisis levels, as measured in seasonally adjusted terms.
All in all, a more favorable external environment should help boost real GDP growth to 6.2 percent in 2010. After this year, slower growth in developed countries, emerging capacity constraints as capacity idled during the crisis is quickly put to use, and the weight of the ongoing political turmoil on new investment, should likely keep growth below Thailand’s historical average of 5.1 percent. On the whole, Thailand’s fiscal and financial picture remains solid

‘‘In part, the gains in the market are a function of wealth creation. Asian and Middle Eastern household wealth is growing faster than in the United States and Europe,’’. The broadening and deepening of the Asian capital markets has helped draw savings away from traditional asset classes such as bank deposits and mutual funds to equities.
In part, this may reflect the greater volatility in earnings in smaller companies.

In 1972 the Government took a further step in this direction by amending the “Announcement of the Executive Council No. 58 on the Control of Commercial Undertakings Affecting Public Safety and Welfare”. The changes extended Government control and regulation over the operations of finance and securities companies, which until then had operated fairly freely. Following these amendments, in May 1974, long-awaited legislation establishing “The Securities Exchange of Thailand” (SET) was enacted. This was followed by revisions to the Revenue Code at the end of the year, allowing the investment of savings in the capital market. By 1975 the basic legislative framework was in place and on April 30, 1975, “The Securities Exchange of Thailand” officially started trading. On January 1, 1991 its name was formally changed to “The Stock Exchange of Thailand” (SET).

The United States said it has accepted Burma’s invitation to send two election observers and three journalists to monitor and report on upcoming by-elections in the Southeast Asian nation.

U.S. State Department spokeswoman Victoria Nuland, speaking Wednesday, praised the invitation, calling it a “welcomed first step” by Burma’s new government as it seeks to restore ties with the West. Those ties were severely strained by decades of Burmese military rule. Nuland said Washington will consult with other observer countries, including a grouping of Southeast Asian nations, in the runup to the April 1 polls.

The U.S. response came hours after the Thai-based Asian Network for Free Elections coordinator Somsri Hananuntasuk was told to pack her belongings and leave Burma on Tuesday. She was told to reapply for an appropriate visa instead of the tourist visa she used to enter the country last week.  

She was attempting to persuade elections officials to allow her group to monitor the upcoming polls.

The U.S. and European invitations mark a reversal from controversial elections in 2010, which brought to power a government dominated by close allies of the former military government.

However the new administration has introduced a series of reforms, including permitting the opposition National League for Democracy and its leader, Aung San Suu Kyi, to participate in the by-elections.

Earlier Wednesday, U.S. Embassy spokeswoman Adrienne Nutzman, speaking in Rangoon, called it “notable” that the invitation was extended to foreign journalists as well. She said the move demonstrates an increased openness in the country.

The United States and the European Union have said the April 1 elections will be a crucial test of the Burmese government’s commitment to reform, and will in large part determine whether long-standing Western sanctions will eventually be lifted.

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US Accepts Burma’s Invitation to Observe April 1 Vote

After seven months since the major shareholders of Malaysia’s national carrier Malaysia Airlines (MAS) and AirAsia announced that it would undertake a share swap, the deal is apparently going through a rough landing.

Rumor has it that the deal is scrapped after unions representing MAS employees protested against the share swap agreement that would result in a large number of staff losing their jobs. The deal is also being investigated for running against anti-competition laws.

Much as one would like to think that this alliance was made for commercial reasons, political stakes run equally high if not higher in this deal as Malaysia’s 13th general elections are widely expected to be held within the next few months.

It was reported that the government had second thoughts on the alliance and even planned to take MAS private by taking over the stake of its investment arm Khazanah Nasional in MAS and make an offer for the remaining shares in the liner from budget carrier magnate Tony Fernandes.

Under the deal AirAsia’s major shareholder and boss, Fernandes, was supposed to take 20.5% shares in MAS, while Khazanah takes 10% of AirAsia. At first glance, analysts said Fernandes got the better deal. But Fernandes was also known for turning around ailing companies, in a similar fashion to how he bought AirAsia for RM1 and take over RM40 million of debt 11 years before he turned it into an a popular budget liner in Southeast Asia that is aggressive in growth expansion.

While there is still no confirmation that the deal is called off, there is mounting pressure for the Malaysian government to step in following protests from unions that represent about 20,000 MAS staff that are averse to the deal. The union has threatened to back the Opposition if the matter is not resolved.

On the other hand, there is also much to consider in terms of whether the alliance has actually made business sense for both airlines.

When the deal was first announced, it was received with mixed reviews with some saying that it would help reduce overlapping of flight routes between the two rivals and effectively increase cost savings. The deal also showed signs that the government was weary of MAS’ constant losses and in need of a maverick to turn it around. Others saw it as the dawn of a cartel in the country’s aviation industry.

Questions on how the alliance would really benefit the aviation industry as well as customers constantly arise when both airlines claimed that by not having overlapping routes, that would reduce competition between two carriers as they focus on each others’ niche. The alliance was also supposed to give way to a super-luxury business via a new brand.

Indeed, even before that happened the first result of that alliance were the cancellation of some routes. AirAsia X- the budget carrier’s long-haul flights unit – retreated from India and Europe, as well as most recently, Christchurch, New Zealand, to open routes to Australia.

Reduced competition between the two carriers, however, does not seem to bring value to customers, as some have complained that AirAsia also reduced number of flights between East and West Malaysia, causing travel costs within the country to balloon and eventually requiring the Transport Ministry to intervene in order to resume those flights.

Meanwhile, MAS posted yet another year of heavy losses, signalling that it needed more than a share swap deal to fix its legacy problems.

However, in an unprecedented move, MAS’ chairman MD Nor Yusof released a statement recently in what appears to be an appeal for the alliance to go on. “Malaysia Airlines must be allowed to focus on pulling itself out of its current financial crisis.”

“Malaysia Airlines is a very sick patient and its condition is quite critical. Indeed, there is a full range of prescriptions available. Judge us by the results, not by the choice of prescription,” he said.

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Rough landing for MAS-AirAsia alliance

On tour in Europe, China’s privileged children reflect inequality and self-confidenceBRUSSELS: On a blustery February evening in the Tyrolean town of Kufstein, pandemonium reigned inside the usually lugubrious Thaler Hotel. Gaggles of Chinese children swarmed the corridors. “Hi!” one called out. My Chinese was rusty, but adequate. “Ni hao,” I replied. “Have you had a fun day?” Nonplussed, the boy fell momentarily silent. “Are you Chinese?” asked another bespectacled child with braces flashing silver across his teeth. “Do I look Chinese?” I countered. “You speak Chinese,” he parried. A girl with bobbed hair and grownup expression sighed. “Don’t you know?” she said with a frown. “These days it’s normal for foreigners to speak Chinese. It’s no big deal.” And it’s also increasingly normal to see hoards of Chinese children hitting Europe’s ski slopes, shopping malls and chocolate shops. If it’s school-vacation holiday in China, then it’s study-tour time in Europe.  I joined one of six groups of children visiting Europe for the Chinese New Year break in late January, a trip arranged by a German company, ECS Tours.

Run by a young couple – German lawyer Rudolf Reiet and Xing Li – ECS is a new player in the lucrative market for Chinese study groups in Europe. In a country where many workers earn an annual income of around $1,500, parents paid up to RMB 60,000, or US$9,500, to send their children on whirlwind tours of the continent’s sights. In addition to holiday photos, the children were expected to bring home skills like eating with a fork and knife and learning the appropriate time to clap at a classical music concert. If it’s school-vacation holiday in China, then it’s study-tour time in Europe. Chinese tourists, some 3 million of whom visited Western Europe in 2010, have already remade the traditional European Grand Tour according to their own tastes and consumer culture.

Typical stops include Paris for romance and Louis Vuitton; Switzerland for mountains and chocolates;  German towns like Trier, the birthplace of Karl Marx; and Metzingen, home to several factory outlets and the headquarters of Hugo Boss. Chinese travelers have also emerged as the travel industry’s knights in shining armor, riding to the rescue of Europe’s industries suffering the effects of stagnant economic growth. In 2011, Chinese travelers accounted for 62 percent of Europe’s luxury goods sales according to one estimate.

The 35 children in my group were from a primary School in Chongqing and receive a truncated version of the new Chinese Grand Tour with a few days each in Germany, Switzerland and Austria.

Talking with them offered a glimpse into the attitudes and aspirations of the country’s future workforce.

These children were born in 2000 amid  anticipation of China’s imminent rise to superpowerdom, an idea that would have seemed improbable even a decade earlier. Collectively, the children provide a snapshot of China’s new elite. Many are sons and daughters of officials of China’s ruling Communist Party. “They talk just like little lingdao leaders, ready to launch into a politically correct speech at the asking,” Reiet said. Others are children of entrepreneurs.

Reiet smiled, recalling a child who had brought along packets of instant noodles to sell to classmates bored with European fare at the inflated price of €5 each. Over dinner, the conversation at our table was about money. One jolly, plump 11-year-old grinned and pointed to her friend: “Do you know how much cash her father gave her for this trip?” Chinese travelers are the travel industry’s knights in shining armor, riding to the rescue. “Stop it, stop it!” gasped Xue, trying to put a hand over her friend’s mouth. “€4000!” the girl exclaimed, undeterred. “Can you believe it?” Fan then happily explained that her father had given her €2,000.

The children were comfortable talking about money, but ask a question about politics, even something as basic as whether their parents were party members, and they immediately went quiet. Another girl at our table had looked on, disapproving of the conversation, and when others demanded to know how much spending money she carried, she refused to tell. I asked what her father did.

Reluctant to answer, she finally confided that he was a bank executive. One girl let out a whoop. “You must be really rolling in it!” she laughed. China’s per capita GDP might still be about a sixth that of the United States, but these are China’s children of privilege.

The West would not automatically associate the professions of some parents– including policemen, municipal government officials, army officers and investment bureau bureaucrats – with wealth. Despite decades of economic reform, China’s state-led capitalism has created a murky, often corrupt world, where the line between government officials and entrepreneurs is blurred. Local officials still have power to dispense patronage and lubricate business deals.

The result is scenes as when the scrawny 11-year-old daughter of a police officer waved a platinum credit card a Swarovski Crystal shop. She had picked out a crystal-encrusted watch that cost €2,800 and explained she was buying it for an auntie. Over the course of the next hour she spent a total of €4,200 on gifts for her family. Another son of a policeman joined children snapping up crystals like candy and held up his crystal dog. “You know what I like about this?” he said. “It’s not ‘made in China!’” Half the staff at the Swarovski shop were Chinese, and some of the local Austrian clerks had even learned basic Mandarin. Most of the children took this in stride. And for children of an emerging superpower, first impressions of Europe only confirmed their childlike sense of cultural superiority.

There was a distinct touch of condescension when I asked the children how they had enjoyed Europe thus far.  For children of an emerging power, first impressions of Europe confirmed a childlike sense of superiority. “The hotel rooms are rather small here,” said the bank executive’s daughter. Another 11-year-old girl was critical of the traffic. “So many rules to follow on the road. I’m not sure who gets right of way. It must be scary to drive here!” Another girl, whose father is an engineer and mother a housewife, dissed the breakfasts. “All that ham,” she muttered darkly, missing the typical morning fare for Chinese, hot buns stuffed with pork or a rich bowl of congee, rice porridge. “But,” she continued, “it’s a lot more peaceful out here than in China. Quiet.” I thought about the children’s hometown, Chongqing, a municipality in China’s southwest and one of the largest urban centers in the world – home to 32 million people, four times that of Austria’s population. What I remembered most from my own visit to Chongqing in 2008, was the ceaseless aural assault: churning cement mixers, sizzling spicy noodles at roadside stands, spluttering exhaust pipes and heavy thudding of wrecking balls. Everywhere were sounds of trade and movement, the old giving way to the new. “You mean it’s a lot more boring out here,” giggled another girl. Both grinned in agreement. For a vast, emerging country like China, defined by continuous change and a headlong rush towards trade and infrastructure development, Old World Europe could understandably appear a tad dull. And while the children did accomplish their mission of learning proper use of fork and knife and filling cameras with pretty pictures, they took away more – a conviction that China is more developed and urban than Europe, though Europe is cleaner, quieter, with plenty of expensive crystals and watches to buy. And yes, foreigners speaking Chinese is normal.  

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Children of China’s Future – Part I

Stocks are sizzling in Hong Kong, up 16% this year, but when it comes to hiring it looks more like a bear market, with the city’s employers feeling the gloomiest they have since 2009.

According to survey of 810 local employers conducted by ManpowerGroup, employer hiring expectations are the weakest they’ve been since the fourth quarter of 2009. Over 80% of those surveyed expect that their staffing levels will stay flat in this upcoming quarter, while just 11% anticipate that such levels may expand.

That’s in sharp contrast to the mood last year around this time, when optimism over China and Hong Kong’s economy prompted nearly 70% of Hong Kong respondents to a Hudson Highland Group Inc. survey to say they planned to increase hiring.

Hong Kong’s GDP growth dropped from 4.3% in the third quarter of 2011 to 3% at the end of last year, notes Lancy Chui, Managing Director of ManpowerGroup Hong Kong, resulting in “less confidence” in employment prospects. She also cites “surging retail rents” as a factor in explaining Hong Kong’s tamped-down job creation, as well as financial headwinds more globally.

Plus, the banking sector that lies at the heart of the city has endured job cuts, especially at Western banks  suffering the fallout from Europe’s debt crisis and a generally weaker global economy.

Students about to graduate are still feeling relatively optimistic about their prospects, said Herman Chan, who directs careers and placement at the University of Hong Kong. However, he said, the number of companies that have posted jobs online to target HKU students has dropped slightly, as have the number of jobs they’ve been offering.

“People are always asking me if I have a crystal ball,” Mr. Chan said in an interview, describing himself as “rather cautious” in his attitude toward those current job-seekers. “My expectation is [the job market] will be similar to 2011 for graduates, but not better.”

Across the Asia Pacific region, Manpower reports, their survey found that employers are feeling most buoyant about new hires in India, Taiwan, New Zealand and Singapore—and most wary of adding new staff in Hong Kong and Japan.

Still, if local employers hesitant to invest in more staff needed more persuading, they could refer to a new report (pdf) by the Economist Intelligence Unit that shows Hong Kong’s workforce boasts the highest level of human capital in Asia—earning top marks on quality of education and healthcare, as well as levels of risk-taking and entrepreneurship among its citizens.  Globally, only Dublin outranks Hong Kong on that measure.

– Te-Ping Chen. Follow her on Twitter @tepingchen

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Cumulative appreciation of the renminbi against the US dollar since the end of the dollar peg was more than 20% by late 2008, but the exchange rate has remained virtually pegged since the onset of the global financial crisis.

Economic development has been more rapid in coastal provinces than in the interior, and approximately 200 million rural laborers and their dependents have relocated to urban areas to find work.

China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity.

Nevertheless, key bottlenecks continue to constrain growth.

Its mineral resources are probably among the richest in the world but are only partially developed.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.

Both forums will start on Tuesday.

In 2009, global ODI volume reached $1.1 trillion, and China contributed about 5.1 percent of the total.

China is aiming to be the world’s largest new energy vehicle market by 2020 with 5 million cars.

Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.

Agriculture is by far the leading occupation, involving over 50% of the population, although extensive rough, high terrain and large arid areas – especially in the west and north – limit cultivation to only about 10% of the land surface.

China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.

Hogs and poultry are widely raised in China, furnishing important export staples, such as hog bristles and egg products.

Oil fields discovered in the 1960s and after made China a net exporter, and by the early 1990s, China was the world’s fifth-ranked oil producer.

China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.

Coal is the single most important energy source in China; coal-fired thermal electric generators provide over 70% of the country’s electric power.

Most of China’s large cities, like Shanghai, Tianjin, and Guangzhou, are also the country’s main ports.

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Gloomy Hiring Prospects in Hong Kong

Where exactly has China parked its $3.2 trillion in currency reserves?

Given the country’s gargantuan status as an investor in the debt-laden industrialized world’s government bonds, this is a crucial question for global financial markets and for economies in general.

And the fact is there is no precise answer. We know generally that a large chunk of China’s reserves are held in U.S. Treasury securities, a smaller portion sits in euro assets, and that more recently some have been steered into Australian and Canadian bonds. But we don’t know the details, and when the sums are as large as this, every incremental shift can have a significant impact on prices.

That of course is why China stays mum. Showing its hand could cause the market to move against it, further undermining the measly returns it makes on a conservatively positioned portfolio.

But it’s also why analysts place a rhetorical asterisk into the monthly Treasury International Capital (TIC) System report. December’s release, unveiled earlier Tuesday, showed that Treasury securities officially registered to China fell by $60 billion from 12 months earlier. But as any bond trader knows, China’s central bank and sovereign wealth funds frequently disguise their Treasury purchases by channeling them through proxies, typically in the U.K.

It’s suspicious, then, that the TIC report states that Treasurys registered to investors in the U.K. rose by $144 billion last year. That’s almost as much as the $160 billion surge attributed to Japan, whose giant yen-weakening interventions left it sitting on piles of dollars.

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After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2 % against the US dollar and moved to an exchange rate system that references a basket of currencies.

The Chinese government seeks to add energy production capacity from sources other than coal and oil, and is focusing on nuclear and other alternative energy development.

The People’s Republic of China is the world’s second largest economy after the United States by both nominal GDP ($5 trillion in 2009) and by purchasing power parity ($8.77 trillion in 2009).

Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and that the extent at which China is dependent on exports is exaggerated.

Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

China’s ongoing economic transformation has had a profound impact not only on China but on the world.

The ministry made the announcements during a press conference held in Xiamen on the upcoming United Nations Conference on Trade and Development (UNCTAD) World Investment Forum and the 14th China International Fair for Investment and Trade.

“The growth rate (for ODI) in the next few years will be much higher than previous years,” Shen said, without elaborating.

China reiterated the nation’s goals for the next decade – increasing market share of pure-electric and plug-in electric autos, building world-competitive auto makers and parts manufacturers in the energy-efficient auto sector as well as raising fuel-efficiency to world levels.

China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.

Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.

Fish and pork supply most of the animal protein in the Chinese diet.

Coal is the most abundant mineral (China ranks first in coal production); high-quality, easily mined coal is found throughout the country, but especially in the north and northeast.

China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.

In the 1990s a program of share-holding and greater market orientation went into effect; however, state enterprises continue to dominate many key industries in China’s socialist market economy.

Great inland cities include Beijing and the river ports of Nanjing, Chongqing, and Wuhan.

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The $3.2 Trillion Question: Where are China’s Currency Reserves?

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Central Bank Sees No Big Impact from Inclusion of Thailand on FATF’s Gray List

Thailand’s open and tightly integrated into global trade economy experienced a V-shape contraction and recovery from late 2008 through late 2009
Overall, domestic demand should provide a positive but limited contribution to growth: vulnerable households lost ground in 2009 and risks are substantial in 2010, as falling agricultural output due to the current drought may offset opportunities from the improved overall economic environment. Household consumption levels, which are highly correlated with the poverty rate, contracted in 2009 despite the rebound in the last quarter of the year, suggesting a likely increase in the poverty rate compared to 2008, especially when compounded by the loss in purchasing power from the food and fuel crisis of 2008. The outlook for 2010 is uncertain : average wages are likely to increase, thanks to the reallocation of labor from agriculture to manufacturing. Although labor markets appear very tight, with unemployment below 1 %, the data do not account for the large number of workers who moved to lower-productivity jobs in agriculture and informal services due to the crisis. Many of these workers are now returning to manufacturing, which offers higher wages than agriculture.

‘‘In part, the gains in the market are a function of wealth creation. Asian and Middle Eastern household wealth is growing faster than in the United States and Europe,’’. The broadening and deepening of the Asian capital markets has helped draw savings away from traditional asset classes such as bank deposits and mutual funds to equities.
‘‘Institutional investors want to have the ability to get in or out of a stock without significantly influencing the share price.
Introduction The modern Thai Capital Market traces its origins back to the early 1960s. In 1961 Thailand implemented its first five-year National Economic and Social Development Plan to support the promotion of economic growth and stability as well as to develop the Kingdom’s standard of living. Following upon this, the Second National Economic and Social Development Plan (1967-1971) then proposed for the first time that an orderly securities market be established in order to mobilize additional capital for national economic development.

The creation of Thailand’s first officially sanctioned and regulated securities market was initially proposed as part of the Second National Economic and Social Development Plan (1967-1971). In outlining its proposal for the creation of a supervised securities market, the Second National Development Plan stressed that the market’s most important role would be to mobilize funds to support Thailand’s industrialization and economic development.