The Shine Is Off Asian Properties

DECEMBER 16, 2011   THE WALL STREET JOURNAL

By POLLY HUI And ERIC BELLMAN

HONG KONG—Real-estate prices are falling across much of Asia as government measures to rein in once-booming prices start to bite and the slowing global economy hits export-dependent economies.

The slowdown ends years of increases that have driven prices up by 70% or more since the start of 2009 in the hottest markets, spurred by strong economic growth and an influx of investors, many of them foreign, who view Asian real estate as an investment that is relatively immune to the global financial turmoil.

Markets such as Beijing, Hong Kong, Singapore and Sydney are all seeing outright price declines, while prices are flat in Seoul. In smaller markets, prices are flat in Bangkok and Kuala Lumpur. In Japan, land prices are down for the 20th consecutive year.

Agence France-Presse/Getty Images

A luxury tower in Hong Kong, where prices in July fell for the first time in three years.

Few expect a property bust like in the U.S., though real-estate developers could suffer as sales volumes tumble, leaving them unable to pay off their lenders. Residential sales volume in China, for example, fell 3.3% in November from a year earlier, according to the National Bureau of Statistics, following an 11.6% drop in October.

Strong demand in many markets such as China is expected to underpin prices. The exception is Singapore, which is the one market where some analysts think price declines could hit 30% in the next three years.

More than 100,000 new residential units in Singapore are expected to be completed in the next three years, according to Standard Chartered analysts. The construction boom comes as prices have risen 70% in the past five years, prompting the government to impose taxes on sales to foreigners or on locals buying multiple units. Foreigners, mostly Chinese, Indonesian, Malaysian and Indian, made up 36% of all new-home sales so far this year.

"From late 2012 we believe the sector's structural issues—rising levels of unsold inventory due to robust launch schedules coupled with a formidable pipeline of completions—will continue to depress rents and capital markets," said David Lum, an analyst for Daiwa Capital Markets, in a recent report.

While Singapore's official government residential-property indexes show that prices edged up in the city-state last quarter from the quarter before, property consulting company CBRE Group Inc. said average luxury-home prices in the third quarter fell close to 2% from the previous quarter. Data from the Urban Redevelopment Authority shows the number of vacant apartments is climbing.

The declines often can be blamed on governments looking to cool soaring property markets in part to quell anger by residents who have been priced out of the market.

Real-estate prices are on the decline in many Asian cities. Richard Price, Asia-Pacific CEO of CBRE Investments, joins Asia Today to discuss which markets are the best bets for aspiring property investors.

While some of the region's developers and investors are hoping that governments may roll back their property-cooling measures, others say concerns about property bubbles will force governments to keep their restrictions in place. "Right now, to many of the governments including China and Singapore, they see more risks in asset bubble forming than a sharp fall in housing prices," said Jinsong Du, an analyst at Credit Suisse.

In China, where the government has clamped down on speculation in the housing market, average property prices in 70 Chinese cities posted their first monthly decline in October.

"We still see a strong medium-, long-term demand for residential developments in China because people always want to upgrade or improve their living standards," said Justin Chiu, executive director of Cheung Kong Holdings Ltd., the property flagship of Hong Kong tycoon Li Ka-shing, which has increased its presence in China in recent years.

Hong Kong, which has seen home prices surge almost 75% since the beginning of 2009, recorded its first fall in property prices in three years in July. From July to October, prices fell 4%. In November, the number of residential property transactions in Hong Kong fell 64% from a year earlier, according to Land Registry data.

"The drops in home prices in China and Hong Kong are moderate partly because there are simply not that many transactions. Property owners are holding onto their properties and refusing to sell them cheap in bad times," said Nicole Wong, regional head of property research at brokerage firm CLSA.

Hong Kong Chief Executive Donald Tsang said Friday that the government's measures to curb speculative activity, including an additional tax on buyers who sell within two years of purchase, will remain in place.

Enlarge Image

Agence France-Presse/Getty Images

Viktor Vo of Hungary powers his boat across Marina Bay with the skyline of Singapore in the background on November 18, 2011.

Australian property prices have fallen steadily this year, stopping a multidecade run higher. In the most recent statistics available, home values fell a seasonally adjusted 0.5% in October from September, according to RP Data-Rismark. Price declines have been worse in flood-ravaged Brisbane and mining boomtown Perth.

In Southeast Asia, real-estate prices in Kuala Lumpur are expected to follow Singapore lower, while Bangkok, where the market was already weak, was hurt by Thailand's worst floods in 50 years. The two healthiest markets appear to be Jakarta, boosted by local demand, and Manila, by strong remittances from abroad.

Prices of homes in the Seoul metropolitan area rose by only 0.6% from January to November this year, while construction-related investments fell from the second quarter of 2010 to the third quarter of this year.

—Geoff Rogow in Sydney, Miho Inada in Tokyo and Se Young Lee in Seoul contributed to this article.

上銀科技 發展先進技術力

2011/12/14  數位時代

【撰文／劉建宏】

「這款重負荷的滾珠螺桿可承受比一般標準高出二、三倍以上的負荷，除了具備高加減速特性，使用壽命也較長，如全電式射出成型機、半導體製造裝置、沖壓機和CNC加工機等都會使用到，」上銀董事長卓永財指著自家產品驕傲地說著。

上銀主要產品包括滾珠螺桿、線性滑軌及工業用機器人，而旗下子公司大銀微系統則負責線性馬達和位置量測系統等，應用範圍涵蓋了電子業的半導體晶圓搬送和平面顯示器檢測等自動化設備。就連印刷、醫療、軍事、交通運輸等生活大小面向皆需要用到上銀的傳動控制系統，上銀甚至是全亞洲唯一擁有線性馬達全面量產能力的公司。

一切看似如「黑手產業」的表面，卻是最高科技的。例如滾珠螺桿與線性滑軌可說是所有精密機械的關鍵零組件，越精密的機械，越需要高階的移動器具來仔細定位，只要一個位置沒對準，足以嚴重影響生產過程的良率，因此各行業在升級自動化設備時絕對少不了它們。

堅守「台灣製造」的上銀，在傳統精密儀器大國日本、德國夾擊下殺出一條血路，搶下三星、索尼、夏普等國際客戶。甚至像是iPhone上多個孔洞，靠的也是上銀的滾珠螺桿跟線性滑軌，才能精準定位鑽孔。

用技術拚高下

「只要掌握高度利基性的製程和技術，小企業也有機會與機械大廠一拚高下。」1983年，卓永財任職的銀行，委派他整頓財務告急的三星五金，他花了一整年蹲在生產線了解流程與技術，雖然辛苦，卻也見識到金屬加工產業的商機。

也因為這段經歷，雖然是金融業出身，但自1989年創立上銀開始，卓永財一直對產品技術創新有相當的執著和堅持。1993年，上銀成立才四年，卓永財就購併了德國一家倒閉的滾珠螺桿廠，為的是快速獲取技術。

此外，為了進軍全球市場，上銀更買下國外大廠的關鍵技術，強化自身體質，比方購併以色列驅動器與控制系統廠Mega-F、買下製造螺紋磨床的英國Metrix，拿到了製造滾珠螺桿最重要的設備技術等。如同卓永財所說：「滾珠螺桿和線性滑軌未來仍可以不斷被改良，變得更精密，還有更多意想不到的地方。」

舉例來說，為了因應全球先進國家面臨人口老化的問題，最近上銀便替德國第二大工業集團蒂森克虜伯（ThyssenKrupp）研發出新式的家用電梯，這裡頭採用了上銀的直驅式馬達製程技術，搭配傳動功能良好的滾珠螺桿一起使用，不僅沒有油壓式電梯容易漏油的環保問題，與一般鋼纜式電梯相比，還可減少電機室空間，具有降低成本、能源使用效率高及安全性穩定等優點。

上銀也將線性滑軌及滾珠螺桿應用在醫療領域，例如病床的自動升降調整器、血液細胞攝影機、癌症開刀等精密儀器，還有研發多年終於量產、適合小切口進行的外科微創手術開刀機械手臂等。

這些新領域的應用並非憑空想像而來，成立至今已超過20年的上銀，連年獲選為全國專利研發百大之企業，手中共握有超過800件的專利，數量已直逼國際級同業。就連卓永財也有多項個人發明專利，得到國家產品創新獎肯定。

「一個產業如果真的要有長期競爭力，一定要做基礎研發，」卓永財指出。目前上銀的全球市占率已直追前二大的日本競爭對手NSK和THK，但他仍每年親自參與國際上每一場重大的研討會和展覽活動，到最前線去了解市場狀況和未來的新應用趨勢。

為了更快掌握新的技術發發展，上銀還在德國、莫斯科、東京三地設立研發中心，並與加州大學柏克萊分校合作。此外，卓永財自八年前也開始在台灣舉辦機械碩士論文獎，每年砸1千萬元經費，除了提供獎金外，他還安排歷年得獎師生，專程前往日本參觀工具機大展JIMTOF、豐田產業技術紀念館、日本工具機製造大廠OKUMA大隈與MAZAK。今年更將觸角延伸至兩岸四地，擴大舉辦機械博士論文獎，每年投資在研發部分的經費就占到營業額的5％～10％，「我希望能有效扭轉大家視機械業為黑手產業的刻板印象，讓更多年輕人願意投身其中！」

金磚四國之父談歐債與中國股市

2011年 11月 23日   THE WALL STREET JOURNAL


巴倫週刊

高

盛資產管理公司（Goldman Sachs Asset Management）董事長吉姆•奧尼爾（Jim O'Neill）上週就動盪的歐洲市場、成長型市場的魅力以及對股市的預期發表了自己的看法。

《巴倫週刊》：你認為歐元危機會以怎樣的形式發展？

相關報導

世行行長：世界仍處“危險地帶”
IMF副總裁朱民﹕世界經濟正大幅放緩
中美歐誰的問題最刻不容緩？
中國已無力擔當世界經濟引擎
專欄：中國恐將弄巧成拙？

奧尼爾：我們或是需要減少成員國的數量﹐或是加大融合的力度。這並非一次信貸危機﹐而是一場有關歐洲貨幣聯盟（European Monetary Union）結構和領導力的危機。這和婚姻一樣﹐只有當某方面出問題時﹐你才能判斷出其牢固程度。無論《馬斯特里赫特條約》（Maastricht Treaty）的具體標準是什麼﹐各國還是成功地加入了歐盟﹐有關經濟增長和穩定公約的具體規則並未發揮作用。歐洲國家需要更多真正的融合才能把歐盟變成類似歐羅巴合眾國（United States of Europe）那樣的實體﹐否則歐盟無法存續。不過﹐這並不容易。因為很明顯歐洲各國同美國各州並不相同﹐民眾也不會就成立合眾國一事進行投票。一個有趣的變化是﹐德國執政黨基督教民主聯盟（Christian Democratic Union）倒是在原則上樂意支持成員國脫離歐盟。

將來不也會出現任何明確的自願選擇。在歐洲貨幣聯盟內部﹐希臘和葡萄牙可能最不夠格。但如果你允許希臘和葡萄牙脫離歐元區﹐那麼市場會因地中海沿岸所有國家都有可能脫離歐元區而發生暴跌。我不確定如果沒有意大利﹐歐洲貨幣聯盟是否還會存在。意大利南部的情況很差﹐但北部的情況則不錯﹐甚至能和德國與法國的大部分地區競爭。

《巴倫週刊》：你怎麼看意大利新總理及其恢復穩定的措施？市場因此恢復穩定了嗎？

Goldman Sachs

高盛資產管理公司董事長奧尼爾

奧尼爾：我非常瞭解意大利總理蒙蒂（Mario Monti）。我是歐洲經濟智庫Bruegel的董事會成員﹐而蒙蒂則是該智庫首任主席。作為一名技術性官僚﹐在所有可供選擇的候選人中﹐蒙蒂是最優秀的。而且他的觀點非常傾向歐洲。但一位非民選官員能否真的領導意大利支持某些艱難的選擇？眼下我所見到的情況是歐洲央行（European Central Bank）又一次錯失了更加積極地支持意大利債券市場的機會。歐洲央行應該採取更傳統的量化寬鬆政策﹐它必須更積極地介入歐洲的核心地帶。歐洲央行具有獨立性且從原則上保護這種獨立性是件好事﹐但如果歐洲貨幣聯盟不復存在﹐那麼歐洲央行還有什麼獨立性需要保護呢？今年8月瑞士央行（Swiss National Bank）在危機前干預匯市就是一個突出的例子。瑞士央行打壓瑞士法郎幣值並聲明說他們會動用無上限資源的做法收效明顯。瑞士法郎下跌了20%﹐當然瑞士央行幾乎沒有付出任何代價。讓我驚訝的是歐洲央行竟然沒有類似清晰的目標。如果歐洲央行任由意大利債券市場自行發展﹐人們擔心的銀行業問題將會變得更糟。比如美聯儲（Fed）就不會以堅持原則為由任由事態發展。

《巴倫週刊》：歐洲貨幣聯盟得以存續的幾率有多大？

奧尼爾：在未來五年的時間里﹐歐洲貨幣聯盟還將繼續存在﹐但前提是意大利沒有脫離歐元區。但歐洲貨幣聯盟的前路坎坷。意大利是歐洲核心地區的一個大型經濟體﹐意大利北部的競爭力幾乎不輸給任何一個國家。沒有意大利﹐歐洲貨幣聯盟就不存在﹐因為德國企業堅持意大利必須留在歐洲貨幣聯盟內。

《巴倫週刊》：投資者又該如何在歐洲市場賺錢？

奧尼爾：你所投資的對象是評級甚高的歐洲各國政府﹐尤其是德國。更為有意思的一面是股票市場。在過去兩週內﹐歐洲市場和全球股市對歐洲債務問題的敏感度大大降低。現在股價相當便宜。你要稍稍往前看﹐假設我說的是正確的﹐並相信會有解決方案﹐歐洲貨幣聯盟能夠存續﹐未來歐洲股價會大幅回升。

你必須要考慮到希臘發生債務違約的可能性。如果不發生重大違約﹐希臘是無法贏得當前的挑戰並挺過更多的財政緊縮。明年一季度末前可能就會發生這種情況。我不確定希臘是否會退出歐洲貨幣聯盟﹐但我認為希臘違約的後果是可控的。我也不認為葡萄牙發生債務違約是不可避免的事情。阿根廷當年的情況就是一個參照：2002年阿根廷貶值比索併發生債務違約。接下來近兩年的時間內﹐阿根廷的情況繼續惡化。有人擔心這會影響週邊市場﹐但實際情況是各個市場都在反彈﹐尤其是巴西。當然﹐阿根廷股市的表現也很好。

《巴倫週刊》：讓我們換個話題。你發明瞭“金磚四國”這個詞﹐指的是巴西、俄羅斯、印度和中國。

奧尼爾：我是發明瞭“金磚四國”這個詞。它改變了我的職業生涯。政治領導人創建的金磚四國俱樂部是我從未料到的。順便說一句﹐他們還沒有邀請我參加他們的會議。創建獨立的金磚四國基金的想法純粹是一個意外所獲。

但金磚四國還不夠。

一年前﹐我發明瞭“成長型市場”這個詞﹐因為我的新工作是擔任高盛資產管理公司董事長。我震驚於退休基金對世界的看法有多保守和謹慎﹐此外﹐儘管“金磚四國”這個詞已經很流行﹐人們仍然把新興市場視為災難。他們的看法大錯特錯。發明這個詞的目的就是要幫助高盛資產管理公司的5,000名員工認識到世界在出現怎樣的變化﹐並通過他們﹐讓我們的客戶也認識到這一點。

成長型市場的八個國家包括金磚四國﹐還有印度尼西亞、韓國、墨西哥和土耳其。這八個國家每個都佔了全球GDP的1%或更多。這就是成長型市場的定義。本世紀的第二個10年﹐這些國家總的GDP將增長16萬億美元﹐比美國和歐洲加在一起多了約一倍。當他們在推動世界經濟時﹐人們為什麼還要稱其為新興市場呢？正因為如此﹐我將這些國家稱為成長型市場。你不能再像過去那樣看待新興市場了。

至於人均GDP﹐有些國家確實屬於“新興”範疇。

顯然﹐由於財富因素﹐這些國家不同於七大工業國(G7)。但有些國家並不比G7差很多。目前﹐韓國人均GDP為兩萬美元﹐巴西為1.5萬美元。如果你等到這些國家像G7一樣富裕的時候﹐就已經失去了投機機會。如果這些國家會像G7一樣富裕﹐下一個10年他們將是最好的投資。

《巴倫週刊》：他們沒有受到歐洲危機的影響嗎？那些為項目管理提供資金的銀行又怎麼樣呢？

奧尼爾：其他很多金融機構和私募股權人士應該將這視為一個機會。對於成長型市場和世界其他地方來說﹐最重要的地方是中國。而中國的情況取決於通貨膨脹。最近有強有力的證據表明﹐中國當局從一定程度上對本土銀行借貸放鬆了控制﹐特別是對小機構的控制。這對中國來說無疑很重要﹐中國在成長型市場的發展中佔主導地位。土耳其是最容易受到歐洲銀行業問題沖擊的國家。但歐洲危機是一場北大西洋危機﹐而不是一場全球危機。

《巴倫週刊》：你認為中國的增長情況會如何？

奧尼爾：未來12個月﹐金磚四國以美元計算的經濟總值將增長2萬億美元。這相當於又產生了一個意大利﹐不過﹐如果這些國家的通貨膨脹率不斷飆升﹐則不會實現這樣的增長。最近最重要的新聞是中國消費者價格指數(CPI)。非常有趣的是中國股市又經歷了一次大幅飆升。如果明年一季度之前中國無法將通貨膨脹率控制在4%以下﹐將越來越難以保持7%、8%或更高的增長率。他們今年的問題不是歐債危機。很多國家的通貨膨脹看來開始回落﹐這個事實無疑是好消息。有點奇怪的是﹐歐洲危機帶來了額外的好處﹐這是因為危機幫助拉低了大宗商品價格。

《巴倫週刊》：那麼﹐中國是否實現了軟著陸？

奧尼爾：現在下結論還有些為時過早﹐但過去一個月的證據明顯支持這一觀點。下個月的通貨膨脹就可能輕易地再降一個百分點。這樣﹐下個月的通貨膨脹就會降到5%以下。如果在下個月中旬之前出現我所說的這種情況﹐中國股市將早已經進一步大幅飆升了。

《巴倫週刊》：世界其他地方的情況會怎樣？

奧尼爾：歐洲已經處於衰退之中。儘管如此﹐我認為明年全球經濟增長率將接近4%。我在這個行業就要滿30個年頭了﹐期間增長率一直是3.6%。如果全球經濟增長接近4%﹐就可以證實歐洲並不是推動世界經濟或世界市場的動力。我認為﹐股市牛市開始於2009年﹐開始於後危機時期﹐主要是因為金磚四國和美聯儲的貨幣政策﹐因為他們﹐世界經濟增速才接近4%。如果在中國、金磚四國和成長型市場的推動下﹐明年的世界經濟增速接近4%﹐而美聯儲政策相對寬鬆﹐那麼股市只有在持續不斷的壞消息的打壓下才會下挫。

《巴倫週刊》：美聯儲會認為有必要推出第三輪量化寬鬆政策嗎？

奧尼爾：美國今年7月和8月的經濟狀況要好於很多人的預期。不妨看看美國最近首次申請失業救濟人數﹐回顧我大部分職業生涯﹐這是個很好的指標。我認為美國的經濟增速將在2%至3%之間。如果美國政府針對房地產市場推出一些舉措(看似很有可能)﹐美國的經濟增速可能會再次超出常規趨勢﹐躍至3%以上。

與目光狹隘的歐洲形成喜人對比的是﹐美聯儲清楚地知道自身偏向：如果美國重現7月曾短暫出現的疲態﹐它就會求助於第三輪量化寬鬆政策。但我不確定目前是否有這個必要。為了印證美聯儲的偏見有多強烈﹐你大可以想象﹐美聯儲可能會把名義GDP目標設定在4.5%或5%﹐也就是說﹐通貨膨脹率目標是2%﹐實際GDP目標為3%。這對市場來說將是非常有力的支撐。在我看來﹐未來六個月內﹐美聯儲推出第三輪量化寬鬆政策的幾率是50%。

《巴倫週刊》：再回頭說說股市吧。

奧尼爾：不管是發達市場、成長市場還是新興市場﹐股票估值看起來都相當低。當然﹐這表明投資者看法悲觀。我喜歡關注一年期預期市盈率﹐通過這個指標我可以瞭解市場的趨勢。美國股市的一年期預期市盈率目前不到12倍。歐洲所有單一股市的一年期預期市盈率都是個位數。中國不到10倍。只有印度和印尼兩國的股票看起來不那麼便宜。一個更為保守的指標是平均週期調整後市盈率(CAPE)。

在主導世界股市的15個國家中﹐大部分國家目前的CAPE都比長期CAPE低30%到60%。

在任何一個特定時期﹐股票風險溢價很可能都是瞭解以五年為一個週期的股票形勢的最佳指南。目前﹐這一數字約為過去30年均值的兩倍﹐部分原因在於金磚五國(BRICs)的增長。在債券實際收益率如此之低的情況下﹐股票風險溢價創出紀錄。在我看﹐這說明未來五年股票風險溢價將再次大幅降低﹐而這種情況將僅出現在債券收益率大幅上揚或股票表現極好(後一種的可能性更大)的時候。

《巴倫週刊》：從現在到年底之間這段時間﹐股市的表現會如何呢？

奧尼爾：目前看﹐有三大問題。中國內地通脹情況的改善讓中國股市處於升勢的幾率越來越大。在美國股市方面﹐我認為美國國會超級委員會那幫家伙不管怎樣會弄出個東西交差的。這對美國股市上漲也是個利好消息。至於歐洲﹐在徹底解決希臘債務違約問題之前﹐人們仍會在股市上躊躇不前。三大股市中﹐有兩個都表明形勢即將好轉。所以說﹐讓市場下跌很難。市場上有這麼多資金﹐而人們卻如此悲觀。全球股市將再漲20%至25%。

《巴倫週刊》：在一切問題都高度相關的情況下﹐你應如何投資？

奧尼爾：很難。具有諷刺意味的是﹐中國與美國的關聯度沒有那麼高﹐這也是為什麼投資者對投資中國應該持更開放的態度。其次﹐人們要麼須關注不同的金融投資工具﹐要麼就得尋找有真正特色的市場。我們生活在這樣一個世界里：人人都很偏執﹐人人也都知道自己能失去什麼。為了能最終回報客戶﹐你必須遠離很多所謂的市場基準指標。

另外﹐可在一定程度反映我個人一貫偏見的是﹐外匯市場是擺脫這種相關資產市場理論的好方法。看看過去三個月瑞士法郎的情況吧。該貨幣估值過高﹐而且已經達到了一種極端的水平﹐很明顯瑞士當局會採取措施扭轉這種走勢。另外﹐美元兌日圓匯率也將出現大逆轉。當投資者意識到美國經濟不會繼續走弱時﹐市場就不會希望繼續持有日圓。

《巴倫週刊》：除此之外﹐你還希望投資點什麼呢？

奧尼爾：中國股市﹐因為中國股票的估值的確很有吸引力﹐在經歷了艱難的12個月後﹐中國股市走向了正確的道路。在成長型市場中﹐我最不喜歡印尼。我不認為印尼股市的波動幅度像人們想的那麼大﹐今年到目前為止﹐印尼股市仍處於上漲狀態。根據定義來看﹐歐洲金融股似乎非常便宜﹐特別是地中海俱樂部(Club Med Europe)成員的金融股。

《巴倫週刊》：謝謝你﹐奧尼爾。

LESLIE P. NORTON

本文譯自《巴倫週刊》

Global trade flows shift to Asia

2 December 2011   FinanceAsia


Rupert Walker 

Global trade will continue heading eastwards and intra-regional trade in Asia will lead to a renewed concentration of global demand, according to an Ernst & Young paper published in conjunction with Oxford Economics this week.
The total value of international trade is set to increase from 30% to 37% of world GDP by 2020, while the balance of that trade is likely to shift permanently to the East. World trade in goods will total around $35 trillion, two-and-a-half times its value in 2010, and in services it will double to about $6 trillion. Asia-Pacific will experience the fastest rate of growth in global trade, led by China and India, which will alone account for almost one-fifth of global trade flows by 2020.
Although global trade collapsed during the financial crisis, it has since bounced back, led by trade among emerging economies. Global trade was dominated by Western nations at the start of the 1990s, but their share has declined markedly and this trend is set to continue through to 2020.
“While the advanced economies continue to battle through the financial crisis, the rapid-growth markets are going from strength to strength and are an increasingly significant part of the global economy. They will become an even more dominant force in global trade and as a result businesses are going to have to adjust their strategies to reflect the increasingly regional pattern of world trade that is developing and will intensify over the next decade,” said Gerard Dalbosco, managing partner, Asia-Pacific markets, at Ernst & Young
Measured at current market exchange rates, the global GDP share of the emerging markets is set to increase from around 34% in 2010 to 48% by 2020. China’s share alone is forecast to surge from 9% to nearly 20% over this period. These gains will be at the expense of the advanced economies.
The analysis for the report, called Trading places — the emergence of new patterns of international trade, applied Oxford Economics’ suite of global economic and industry models, and included a survey of 690 senior executives across 17 different markets, and interviews with business leaders to find out what strategies they are deploying.
India and China will steer the continued rise of the emerging markets and, together, these economies will become more important to global trade than the US and eurozone, concluded the report. Almost half the Asia-based respondents to the survey expect to export more than 60% of their output in five years’ time, compared with less than a fifth of the companies in the Americas.
Asia will still to be the most dynamic region in terms of trade, with the fastest growth of exports in goods occurring within the region itself. A trade cluster within Asia has already been formed and China has now become the most significant export destination for most Asian economies. The increasing importance of regional supply chains is a trend that will help to reinforce the importance of both China and India within the overall pattern of global trade.
“The fastest growth of merchandise exports will occur within Asia itself,” said Dalbosco. “More specifically, it will be China and India that lead this expansion. Our bilateral trade forecasts show the fastest growing trade route lies between these two economies, with Indian exports to China growing at an average annual rate of almost 22%, while flows in the opposite direction expand at an average annual rate of 18.5%.”
India and China also represent the quickest growing source of demand for exports from countries outside the region. The projections show that two of the most rapidly growing trade routes will be US exports to China and India, which Ernst & Young see expanding at an average annual rate of almost 16%. China’s exports to Europe, at more than $1 trillion, will be almost twice as large as US exports to Europe.
In addition, by 2020, the total flow of services trade from Europe to Asia-Pacific (excluding Japan) will be bigger than to North America. One of the keys will be the growth of trade in financial services.
Furthermore, Ernst & Young estimates that the shift towards global outsourcing of production, as well as the growth of regional supply chains to serve the rapid expansion of demand from expanding markets, will compress the share of the advanced economies in global trade from a little over 60% in 2010 to around 55% by 2020.
However, Dalbosco warned that with the level of global supply changing so rapidly and demand uncertain, there are a number of alternative scenarios and risks that could threaten or even boost global trade growth.
“Perhaps the most dramatic would be a currency realignment scenario, implying a rebalancing of domestic demand between the US and Asia-Pacific region. This would have significant impacts on projected patterns of trade. Alternatively, even a partial acceleration of trade liberalisation could drive a larger-than-expected rise in global trade flows,” he said.
Meanwhile, the report offers comfort to beleaguered exporters in the US and Europe. Ernst & Young’s forecasts imply that over the next 10 years the US could capitalise on its strength in exporting to Asia, reversing the decline during the past decade. And Europe’s exports to China could rise by $370 billion during the next 10 years.
And China will not be immune from its own vulnerabilities. The country’s dominance in low-end manufactured goods will increasingly come under pressure from lower-cost countries such as Bangladesh, Vietnam and parts of Africa.

© Haymarket Media Limited. All rights reserved.

Google's highly profitable secret war against small businesses and jobs

November 30, 2011


By Tom Foremski 

Google has managed to boost its revenues by billions of dollars this year by attacking thousands of smaller businesses who make money from affiliate programs. It does this by deliberately favoring large brands in its search results.

This war is largely secret because very few people understand this shift. Google manages to deflect attention through publicity about projects such as Google+, or its self-driven cars — none of which are revenue generating businesses.

Yet in its core business, under the renewed leadership of CEO Larry Page, Google has launched an incredibly aggressive strategy targeting mostly small firms. You can see how effective this has been in the following numbers culled from its financial reports.

For example, for the whole of last year, 2010 Google’s revenues from its own sites could barely keep pace with growth in revenues from its AdSense partner network — mostly small firms.

2010:

- In Q1 Google sites grew 20% and partner sites grew 24%

- In Q2 Google sites grew 23% and partner sites grew 23%

- In Q3 Google sites grew 22% and partner sites grew 22%

- In Q4 Google sites grew 22% and partner sites grew 24%

Yet in 2011 this trend miraculously reversed itself within just 1 quarter and Google sites’ growth jumped suddenly and for no outward reason.

2011:

- In Q1 Google sites grew 32% and partner sites grew 19%

- In Q2 Google sites grew 39% and partner sites grew 20%

- In Q3 Google sites grew 39% and partner sites grew 18%

What did Google do that suddenly, its sites nearly doubled their growth rate while partner sites suffered a massive drop?

The answer is that it controls the traffic and that controls revenues. Google managed to shift traffic and revenues from its partner network to its own. That means it keeps

all

the revenues — it doesn’t have to give away 80% of AdSense revenues to partners.

There’s other things that Google has done that hurt small businesses trying to make money online such as banning tens of thousands of affiliates from its Adwords network.

It has gotten away with this strategy by shifting the attention of analysts and media to projects such as G+ and self-driving cars. These aren’t businesses and have no effect on its revenues but that’s the subject of the questions asked by Wall Street analysts on its earnings calls.

I haven’t come across any analysts or journalists looking into this major shift in Google’s business strategy. I haven’t seen any financial analysts explaining how Google has been able to grow revenues so quickly — yet some of the answers are hiding in plain sight — in Google’s financial reports (as above).

Google’s strategy is to set itself up as the largest affiliate and displace the hundreds of thousands of small businesses that make money from affiliate marketing. It wants to be the main affiliate for online sales of branded products and that’s why its organic search results heavily favor large companies — the brand owners.

But this strategy comes at a significant cost — lost jobs as it displaces the smaller firms. It’s not a cost to Google but it is to society.

That’s not a good scenario in today’s hard economic times, it’s a PR nightmare for Google to be seen as anti-small business and causing job losses.

Small companies don’t have a much of a voice in Washington DC and Google knows this. It has been careful not to antagonize the large brand owners, reports one of my contacts, the CEO of a large company that relies on AdSense revenues, because they have lobbyists and they could add their voices to complaints about Google’s business practices.

Google, however, is working hard to keep the US government out of its business. This year it dramatically stepped up its lobbying efforts, hiring more firms and spending a record amount on political influence.

Jessica Guyen reported in the The Los Angeles Times:

Google spent $5.9 million from Jan. 1 through Sept. 30, a 51% jump from a year ago. To put that in perspective, Google spent $5.2 million total on lobbying last year.

Google has doubled its spending on lobbying in the last two years. It has also formed a political action committee to give donations to candidates and it has hired influential lobbyists such as Richard Gephardt, a former House Democratic leader.

So who will come to the aid of small businesses? By the time the government figures out what’s going on, and politicians extract themselves out of the pocket of lobbyists, it’ll be too late.

Maybe Facebook will be a savior of sorts, it has been far more small business friendly than Google lately. But, this might be just a short term strategy because Facebook will face pressure to grab an ever larger share of the revenues flowing through its network, as Google is doing today. That pressure will mount when it becomes a public company next year.

What’s happening to small businesses in the Google ecosystem is precisely why Facebook, Apple, etc, prefer to build a walled garden online and control as much of their ecosystem as they can so they aren’t vulnerable to a change in business strategy by a large partner providing traffic and web services. Google’s decision to start charging third-parties for using its formerly free maps service is a good example.

One of the very few people I’ve found that understand Google’s anti-small business strategy is Aaron Wall over at SEOBook. Here’s an excellent post by Mr Wall on Google trying to stamp out affiliates.

Google Hates Affiliates

At Affiliate Summit last year Google’s Frederick Vallaeys basically stated that they appreciated the work of affiliates, but as the brands have moved in the independent affiliates have largely become unneeded duplication in the AdWords ad system. To quote him verbatim, “just an unnecessary step in the sales funnel.”

It is worth noting that Google doesn’t consider itself “just an unnecessary step in the sales funnel” when they insert themselves as an affiliate.

He recently produced an excellent infographic to explain Google’s focus on large brands.

China Herd Follows the Shorts

NOVEMBER 22, 2011   THE WALL STREET JOURNAL

By DUNCAN MAVIN And TOM ORLIK

Short sellers are apparently running the market for China stocks. But it ain't what they say so much as the fact they say it that has investors hitting the 'sell' button. With a market this vulnerable, investors must question the rationale for holding any but the bluest-chip overseas-listed Chinese companies.

The latest stock to fall under the short sellers' sword belongs to Nasdaq-listed advertising display firm Focus Media Holding Ltd. After short seller Muddy Waters alleged accounting shenanigans, the Shanghai-based company's shares fell 60% in an hour—barely enough time for most investors to digest the short's dense, 80-page report—before eventually closing down 39% on the day.

Carson Block, the man behind Muddy Waters, is no Meredith Whitney—the U.S. bank analyst whose word was enough to send financial stocks spiraling downward during the dark days of 2007 and 2008. But his reports seem to have the same kiss of death impact on valuations for the companies he targets.

There is now a mini-industry trying to find out which Chinese company will be the next focus of short-seller attacks. Hedge funds that discover what shorts are researching can get their positions in place, knowing that once the report is published, the stock is almost bound to fall. In the days before Muddy Waters published on Focus Media, a rapid build-up of short positions was an indication that word of the report's existence had leaked out.

There's an argument that the shorting trend is injecting a welcome dose of skepticism and analytic rigor into the market's view on the China story. In time, that should improve governance at Chinese companies and encourage investors to spend time distinguishing true value from fraud. For now though, with the herd mentality as strong on the way down as it was on the way up, value investors will have little luck. Against that backdrop, the only safe option may be to stay out of the market altogether.

Write to Tom Orlik at Thomas.orlik@wsj.com

China's Developers Breathe Easier, For Now

DECEMBER 1, 2011   THE WALL STREET JOURNAL

By TOM ORLIK

The wild card in China's real-estate sector—unpredictable government policy—just got wilder.

Wednesday's cut to the reserve requirement ratio for China's banks, which frees up more funds for them to lend, might have arrived in the nick of time for cash-strapped property developers. Squeezed between falling sales, tight financing and mounting debts, some had been forced to lower prices.

More in Property

• Residential Property Prices Slipped in November

Data from property consultancy SouFun published Thursday show average prices were down 0.28% month-to-month in November, the third monthly drop in a row. Many expect bigger price cuts to come. Two-thirds of developers surveyed recently by Standard Charted expected around a 10% drop in prices in the next six months.

A shift toward pro-growth monetary policy could change that outlook. Till now, the government has been cutting off funds for developers at both ends. Restrictions on house purchases cut revenue from sales. Controls on bank lending meant borrowing was tough. A looser monetary policy means one of those conditions will be eased.

Vice Premier Li Keqiang said last week that controls on the real-estate sector will remain in place, suggesting the government will make an effort to prevent extra funds from flowing into property. But there is little that can be done to prevent cash flowing to wherever the returns are highest—right now, that means hard-up developers.

The markets certainly see the reserve requirement cut as a positive for the sector. Shares in China's developers surged Thursday. Guangzhou-based Evergrande Real Estate Group rose 16%, one of many developers that outpaced a 5.6% gain in Hong Kong's Hang Seng Index.

A burst of liquidity won't address the fundamental problem of excess supply or bubble-high prices in China's property sector. Indeed, it will probably make them worse. But for now, investors are betting that a shift back toward easy money will postpone the day when those chickens come home to roost.