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Europe: Asia Is Watching You
Over the last week there have been a variety of important meetings in Europe over which Asia has been keeping its proverbial Big Brother eye on. Indeed, it may even be somewhat more than just overseeing the progress of the meetings. According to UBS Asia Pacific’s chief investment strategist, Yonghao Pu, “at the moment, we [Asia] are kind of a hostage to what’s going on in Europe.” Due to activities in the global economy, China’s hand is being forced in a way it’s not especially fond of.
Beijing’s Banking
Beijing has had to make some changes. It already removed some of its demands for rural banks and is now doing the same with its major banks, in an effort to facilitate banks giving out loans while offsetting the global economy’s ripple effects.
Beijing has also been quite firm in its insistence that it will not be fishing the Eurozone out of its hole either. As well, due to less demand, there is decreased manufacturing in China. Since Europe is the biggest export market of China, if the region goes into trouble economically, this will negatively impact all Asian exports. Indeed, according to China’s vice minister for foreign affairs, Fu Ying, “the argument that China should rescue Europe does not stand, as reserves are not managed that way.”
The good news for Asia is however, that the region is doing better financially than Europe. Still, it needs to be aware of the fact that when the Eurozone cracks, it could encounter problems too. Keep watching out for Euro meetings to get an idea of what Asia’s next financial step should be.
Image may be NSFW.
Clik here to view.
Image may be NSFW.Clik here to view.
