Hong Kong, Taiwan and Singapore are caught in an economic typhoon. Activity growth will be hindered by depressed external demand, especially from China (lower demand, economy's upgrading) and tighter financial conditions, including contagion risks. All three economies
will grow below +2% in 2016-17, far below their long-term average.
In the short run, resilient domestic demand will come from reactive policy-making and stimuli in the pipeline are
promising to safeguard growth. In the long run, each hub will have to diversify and reinvent its business model. Hong
Kong appears to be the least agile and the most affected by Chinese woes.
Taiwan has a strong innovation edge but
China becomes a stronger contender. Last, Singapore will benefit from past diversification and branding efforts
especially of its business environment and logistics.
In 2016, insolvencies will increase by +15% in both Singapore and Hong Kong, and by +17% in Taiwan.
Vulnerable sectors include basic materials (too low prices), retail and electronics (Chinese collateral damage), and housing and real estate (leverage)
will grow below +2% in 2016-17, far below their long-term average.
In the short run, resilient domestic demand will come from reactive policy-making and stimuli in the pipeline are
promising to safeguard growth. In the long run, each hub will have to diversify and reinvent its business model. Hong
Kong appears to be the least agile and the most affected by Chinese woes.
Taiwan has a strong innovation edge but
China becomes a stronger contender. Last, Singapore will benefit from past diversification and branding efforts
especially of its business environment and logistics.
In 2016, insolvencies will increase by +15% in both Singapore and Hong Kong, and by +17% in Taiwan.
Vulnerable sectors include basic materials (too low prices), retail and electronics (Chinese collateral damage), and housing and real estate (leverage)