Newsletter By 2021-09-17
The U.S. Senate passed a USD 1.2 trillion cross-party infrastructure investment bill. In the early morning of August 11, the Senate again approved a USD 3.5 trillion budget. If the infrastructure plan is implemented, along with the fiscal budget, it will be a major stimulus for the country. This will help the economy to recover, but also raise inflationary pressures. There is concern that expanding the budget with infrastructure as the core will add trillions of dollars in debt, causing the state heavily indebted. It maybe not an urgent issue, said ANBOUND's founder
Chan Kung, while inflation has been quite high posed a real problem. The inflationary pressure in the United States would last for two years, before returning to normal status.
>>As the EU’s economic recovery is significantly slower than the United States, the European Central Bank’s adherence to the current easing policy will distance itself from the Federal Reserve’s possible policy shift to reduce easing at the end of the year. The impact of inflation and interest rate changes will be extremely challenging for the Eurozone and the European Union. The debt burden on some of EU countries who experienced crises has further piled up. In the case of a long-term downturn, the matter caused by inflation would evolve to be more tense, which would worsen its fiscal imbalance and push banking institutions and financial systems into difficulties. Therefore, of great concern is whether the European Central Bank could safely withdraw from the stimulus in the future and make the normalization of monetary policy.
>>Dato' Ong Chong Yi, ANBOUND Regional Chief Representative (ASEAN), was invited as a keynote speaker at the "
2021 China-ASEAN Trade and Economic Cooperation Forum" which commemorates China-ASEAN's 30 years of dialogue relations. The forum was officiated by the Chairman of Guangxi government H.E. Lan Tianli and China's Vice Minister of Commerce H.E. Ren Hongbin, and was held on the sidelines of the 18th China-ASEAN Expo in Nanning on 11 September 2021. The forum was also attended by Trade Ministers and Ambassadors from the ten ASEAN countries and the Secretary General of the ASEAN Secretariat.
>> Recently, the Central Committee of the Communist Party of China and the State Council issued the Master Plan of the Development of the Guangdong-Macao Intensive Cooperation Zone in Hengqin. This is another important development initiative in the field of regional economic development under the new development pattern. Overall, the Master Plan shows drivers to facilitate the economic development of Macao and Zhuhai. It will pull the level of urban economy but also carry subtle geopolitical significance. It is extremely necessary for Zhuhai, Macao, and related companies and investors to understand the importance of building the Intensive Cooperation Zone.
>>With the gradual slowdown of China's economic growth, the market is concerned about the direction of monetary policy. There are different understandings of the "cross-cyclical adjustment of macro policies", "more forward-looking and effective policies" and a series of policy tones. Debates on policy expectations remain there. The most controversial topic is "credit easing". From the perspective of the transmission of money and credit, ANBOUND economists discussed that the realization of credit easing depends not only on monetary policy, but also on the environment of financial institutions and the real economy. The structural policies adopted by the central bank actually intends to improve environment and realize the effective utilization of financial resources, which cannot be simply regarded as the stimulation of overall credit. The logic of monetary policy has not changed. In fact, it is still "stabilizing credit" under the condition of "monetary stability", so as to achieve the goal of "cross-cyclical adjustment" of stable growth and risk prevention.
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