department of foreign affairs and trade relationships weakening new rules increasing competition new...
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Department of Foreign Affairs and Trade
Relationships Weakening New Rules
Increasi
ng
Competitio
nNew Finance
Needed
Relations under Strain -Many Loans Not Performing
0
10
20
30
40
50
60
Per
cen
tag
e
Peak of Crisis Dec-98 Dec-00 Sep-01
Relations under Strain -Bank Lending Contracting
-30
-20
-10
0
10
20
30
40
50
60
Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02
per
cen
t ch
ang
e
Hong Kong
Japan
Philippines
Taiwan
Thailand
Competition IncreasingTariff Rates Falling
0
5
10
15
20
25
30
Per
cen
tag
e
1995 1998 1999 2000
Competition Increasing Foreign Direct Investment Inflows Increasing
0
100
200
300
400
500
600
700
800
900
US
$ M
illio
ns
Total China Hong Kong
Indonesia Malaysia Singapore
1980 1985 1990 1995 2000
New Finance Sources Needed -Value of East Asian IPOs Rising
0
5000
10000
15000
20000
25000
30000
35000
40000
Nu
mb
er
Total Japan Hong Kong
Republic of Korea Singapore Thailand
1995 1996 1997 1998 1999 2000
Governments Tightening Rules -Checklist of Reporting Requirements
Mandatory consolidated reporting
Disclosure of derivatives
Disclosure of related party transactions1
Reporting frequency in months1
Mandatory disclosure of extraordinary events1
Japan Yes Yes Yes 6 Yes
Republic of Korea
Yes Yes Yes 6 Yes
China No na Yes 3 (2002) Yes
Hong Kong
Yes Yes Yes 3 Yes
Taiwan Yes Yes Yes 6 Yes
Singapore Yes Yes Yes 6 Yes
Malaysia Yes Yes Yes 3 Yes
Indonesia Yes Yes Yes 12 Yes
Philippines Yes(draft) Yes Yes 3 Yes
Thailand Yes Yes(draft) Yes 3 Yes
Vietnam No No No 3 Yes
Australia Yes Yes Yes 3 Yes
Accounting Standards VariableIndex Based on Annual Report Inclusions
0
10
20
30
40
50
60
70
80
90
Per
cen
tag
e
High income economies leading
Hong Kong
Singapore
Australia
Good progress in middle income economies Japan
Malaysia
ROK
Taiwan
China
Slower progress in emerging economies
Thailand
Indonesia
PhilippinesVietnam
Implications for Business?Implications for Business?
Best opportunities in economies moving to rules based business
Listing and disclosure rules
set to reduce risk
Opportunities to
implement ‘regulation
revolution’
Summing up
• Relationship approach set to decline
• Crisis, competition, finance needs driving
move to rules based business
• Slow progress risky in emerging economies
• Aid program opportunities
• Commercial implications significant