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7/29/2019 Low Soo Peng Singapore Business

1/16

Washington State Export Destinations 2011 Value (Millions) % Share

Top 25 Markets and % Share of State Total $56,669 87.5

1 China 11,233 17.32 Canada 8,547 13.23 Japan 6,468 10.04 Korea, South 3,261 5.05 United Arab Emirates 2,753 4.36 Hong Kong 2,079 3.27 United Kingdom 2,017 3.18 Turkey 1,760 2.79 Australia 1,718 2.710 Taiwan 1,715 2.611 Indonesia 1,587 2.5

Asian Markets as Share of Washington State Exports = 46 %

Worth over $26 billion in 2011

16. Singapore, 1.5% 19. Malaysia, 1.3% 22. Philippines, 1.2% 24. India, 1%

Source: US Census Bureau


2/16

CHINA 2012 IN REVIEW

Leadership Transition

Slowing economic growth

Local government debt situation

Falling real estate prices Debt problems, slower growth, weak export

demand

Increased outbound investment Continued friction in the South China Sea


3/16

CHINA 2012 ECONOMIC GROWTH


4/16

NEW POLITBURO STANDING COMMITTEE

President Xi Jinping Premier Li Keqiang

Zhang Dejiang Yu Zhengsheng Liu Yunshang Wang Qishan Zhang Gaoli


5/16

CHINA 2013 OUTLOOK

Economic growth stable Exports remain depressed

Real estate prices declining

Debt problems slow growth Continued emphasis on

innovation

Increased outbound investment Continued friction in the South

China Sea


6/16

OVERALL SLOWING ECONOMIC GROWTH

-1

0

1

2

3

4

5

6

7

8

Optimistic Base Pessimistic Optimistic Base Pessimistic

Total Factor Productivity

Capital Contribution

Labor Composition

Labor Quantity

Percent growth, y-o-y

Sources: The Confe rence Board Global Economic Outlook 2013, https://www.conference-board.org/data/globaloutlook.cfm?

2013-2018 2019-2025


7/16

CHINA GROWTH AREASIN 2013

Planning for Demographic changes

Renewable energy

Online retailing

Infrastructure

Construction / real estate

Pollution mitigation and control Clean and green food products + investment in

overseas agriculture

Expanded acquisition of overseas resources


8/16

CHINA 2013 RISK FACTORS

Diaoyutai / Senkaku Conflict

Pollution

Corruption & Anti-corruption efforts

Rising costs

Economic inequality

Bankruptcy of some smaller cities Growth of unregulated lending sector


9/16

INDONESIAS PERFORMANCE: 2012 IN REVIEW

Source: Bank of Indonesia


10/16

2012 HIGHLIGHTS

IndonesiaFinancialServices

Authority(OJK)formed

Moodysupgradessovereign

credit ratingto investmentgrade: Baa3

from Ba1(Outlook:Stable)

Central

Banklowers BIrate to5.75%

(from 6%)

Largestcontract in

commercial &Boeing

history: LionAir order of230 Boeing

737 airplanesworth $22.4

billion

GarudanamedBest

InternationalAirline

Foreignexchange

reserves hitshighest level

(2012) of$114.93billion

S&P affirms

sovereigncredit rating

at BB+(Outlook:Positive)

Jakarta electsnew Governor

Joko (Jokowi)Widodo (snubspolitical

establishment)

McKinseyreleases

UnleashingIndonesias

PotentialReport:

Now 16th.2030, couldbe worlds7th largesteconomy,

surpassingGermany &UK)

Indonesia

topsNielsonGlobal

ConsumerConfidenceSurvey (Q32012) withscore of

119,(alongside

India).

Fitchaffirmed

sovereigncredit

rating atBBB-

(Outlook:Stable)

Indonesia, asnext APEC

Chair,announces2013 logo &

theme:Resilient Asia-

PacificEngine of

Global Growth

January

January 18

January

February

February

April

April 23

September

September

November

November 21

December


11/16

GOODBUTLOWERPERFORMANCE: WHY?

Crisis in Europe & recession in US Instability in Middle East & Africa Slower economic growth in emerging countries esp. China & India

Trade imbalance with declining exports (& burgeoning imports)

Global economicuncertainty

Overburdened airports: Jakartas CGK at beyond capacity past 6 years Poor condition of ports: Unable to keep up with economic growth Bad roadways, bad traffic; floods

Poor connectivity between towns/cities/regions Policies & regulations deemed as hindrance to businesses

Weak infrastructure &

high logistics costs

Government initiatives

Strong domestic consumptiondriven by emerging middle

class

Influx of investments

Master Plan MP3EI (2011- 2025): Economic development

Master Plan MP3KI (2011- 2025): Poverty reduction

Tax incentives

Highest contributor to economy: 2/3 of GDP

240 million (Worlds 4th most populous nation)

45 million consuming class (to to 135 million in 2030)

Robust consumer confidence with surge in government & private sectorprojects

Second biggest contributor: 30% of GDP Regaining of investment grade: Fitch in Dec. 2011 & Moodys in Jan. 2012

AT Kearney FDICI: Ranked #9 in the world (from 19 in 2010)

2012 realization may top $31 billion (Rp. 300 trillion), a record


12/16

OUTLOOKFOR 2013 POSITIVE

Annual GDP growth target set at 6.8 % (BI forecast: 6.3% - 6.8%)

Domestic consumer demand 65% of GDP = less vulnerable to Europe & US drag

Fitch: Affirmed RIs investment grade at BBB- (stable outlook); boost joining BRICS

Investment realization targeted to increase to Rp. 390.3 trillion (FDI $29 billion)

Household consumption (to 5.8 6.3%) & investment (to 10%) will continue to drivegrowth

Govt set inflation rate assumption at 3.5% - 5.5%

Government to hold BI rate steady at 5.75% (since March 2012)

Per capita income rising & middle class growing (to expand to > total population)

Oil & gas investment to increase: $26.2 billion: 274 work plans & budgets approved

Exploding gas demand = efforts to reduce exports + expand downstream capacity

Sales of capital goods, including machine tools, will rise 8% to $27 billion


13/16

RISKS & CONCERNS

Endemiccorruption/Judiciary a

problem: 118in list of 176 countries

(Transparency International)

Rising inflation fromdomestic fuel subsidies &

power tariff hike

Weak institutions &bureaucratic

inefficiencies: 128 out of185 globally

(World Banks Doing Business)

Political uncertainty:2014 elections

Infrastructure congested& inadequate to support

growth; respond tonatural disasters

Lack of institutions withstrong capital structure tofinance planned projects

Crisis in developedworld: Threaten exports,

foreign liquidity,investment growth

Emerging trend of tradedeficits fueling current

account deficits & hurtingthe Rupiah

Under-developed HR:Low-skilled workforce +Minimum pay increase

not matched withincrease in productivity


14/16

REASONSTOBEOPTIMISTIC + OPPORTUNITIES

Master plans to guidedevelopment & growth:

Impetus for change

Relative political &economic stability:

Conducive to business

Strong & growingdomestic demand: Fuelgrowth, limit exposure

to external shocks

Poverty reductionmeans growing middle

class

Growing middle classmeans better qualified

workforce & biggermarket

Positive investmentoutlook thanks to strongeconomic fundamentals

Abundance of fertileland & natural

resources

Financial marketspoised for volatility:

Stock market tomaintain goodperformance

Financial stability:Investor confidenceevident in influx ofcapital investment


15/16

PUBLICDEBTBURDENS (% OFGDP)


16/16

AT KEARNEY 2012 FDICI

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