Bouncing tigers—or bitten dragons

Bouncing tigers—or bitten dragons?
Emerging market jitters, advanced market rethinks,
and the Asian outlook in 2014
Sponsored by
A management brief prepared by the Economist Corporate Network

Emerging market jitters, advanced market rethinks, and the Asian outlook in 2014
1© The Economist Corporate Network 2014
The Viewscope
A quick read of the brief and its findings
Has Asia lost its way, or is it just
getting started?
The drivers and direction of Asia’s economies
are under increased scrutiny by global
investors in 2014. Emerging Asian markets are
being questioned for their lack of structural
integrity, and a persistent opacity in their
political and regulatory environments.
By contrast, rich-but-stagnant advanced
economies are increasingly attractive to
global capital as their economies finally get
back on track.
Bigger, better…but not all alike.
Emerging Asia’s swiftly tilting demographics may be globally unique
in their speediness, but are symptomatic of a central challenge
facing global investors: all EMs are neither equally sound (or fragile)
opportunities, nor are they developing at similar rates. This demands a
crisper framework for evaluating emerging market fundamentals.
Emergers are doing it for themselves.
There has been a perceptible shift in the pattern of trade among
emerging markets in the past decade; increasingly, this has meant that
emerging Asia trades more with itself. Asia’s trade with other emerging
regions, driven by similar consumption trends, has also accelerated.
Neither—and both!
The Economist Corporate Network believes that neither is
Asia’s time to shine finished, nor is it the gem it once was.
The future of the global economy is both dependent on
Asia’s continued healthy growth—yet Asia’s health is also
dependent on the rest of the world believing in its success.
Still got some heat on it (and in it).
China’s growth continues to moderate, yet observations
that China’s slowing economic progress is systematic of
its eventual collapse are clearly overstated. There are
enormous, and obvious efforts on part of the Chinese
government to engineer a complex and thorough re-
orientation of its economic growth drivers, away from the
capital investment which has fueled productivity gains
for nearly a quarter century, and towards a domestic
consumption-led economy. To achieve this, China has
accepted profound changes in the way it competes globally.
Zeros, and/or heroes.
It appears that enthusiasm for rich world markets
is informing (perhaps even intensifying) distain for
emerging markets. Yet, this is far from a zero-sum game.
Many emerging economies do suffer from such structural
weaknesses as expanding current account deficits, but
many more continue to push millions of new consumers
into the middle classes, sustaining domestic consumption
levels across Asia. This in turn helps the rich world, as
well: Japan’s export levels continue to grow from robust
emerging Asian demand.
Tempest Fugit.
There have been disconnects between market movements
and economic fundamentals, but the degree of variance is
likely due to the tremendous recent change in the world’s
advanced economies rather than change in emerging
market fundamentals. Which is not to say that there are
not good reasons to be skeptical of the EM narrative, nor
is it to say that what plagues emerging markets does not
negatively impact the advanced economies. In the end, it
is the fact that the global economy is continuing to grow
as an interconnected system of goods and capital that is
preserving growth for all participants.

2 © The Economist Corporate Network 2014
Has Asia lost its way, or is it just getting started?
2013 was a surprising year for investors in Asia, in many respects. The long-awaited coordinated
global economic recovery came about, but later, and slower, than anticipated. This delay (the econo-
mies of the US, the Eurozone and Japan were not all growing uniformly positively until well into the
second half of the year) kept global demand dampened for Asian exports uncomfortably longer that
the region needed. Additionally, and ironically, the US Fed’s hinting at an end to quantitative easing
caused a stampede of hot money out of fast-growing emerging markets (EMs)—particularly in Asia.
Yet while this exposed some structural weaknesses in EMs, it was the compounding effect of global
capital’s self-fulfilling prophesy which did more to dampen market momentum in such places as
India and Indonesia; the currencies of both countries are still trading roughly 15% lower than they
were nine months ago. Much of this sentiment has been carried through into 2014; even stalwart
China has felt the unfamiliar impact of global investor mood swings. As of this writing, the renminbi
is trading 0.6% lower against the dollar than it was on January 1st.
By contrast, advanced economies—even, and particularly, Japan—are benefitting from renewed
investor interest. Clearly, global capital does not feel that emerging markets were just a fad; much of
the capital that fled Indonesia in mid-2013 for instance has returned, or at least been replaced by more
confident punters. A rebalanced global economy is still one where emerging markets’ GDP expands at
more than twice the rate of developed ones, and will do so for some time. But what the Taper Tremor
has taught us is that all emerging markets are not equally sound. This Economist Corporate Network
paper argues (at the risk of seeming ambivalent) that neither is Asia’s time to shine finished, nor is it
the gem it once was. Further courting ambiguity, it also argues that the future of the global economy
is both dependent on Asia’s continued healthy growth and on the rest of the world believing in its
success. Key points in this paper are as follows:
• False fragility. There are very few fundamentally flawed economic narratives in Asia; Indonesia
in particular was unfairly lumped into the so-called ‘fragile five’. Global investors must diligently
distinguish between ‘good’ EMs and ‘bad’ ones in Asia—and commit to them.
• China keeps on keeping on. A favorite past-time of the global investment community is to second-
guess the ability of China’s policy makers to keep the world’s second-largest economy on track. We
believe that, in the main, China will continue to be one of the world’s largest growth opportunities,
and while it will continue to mature, it will not implode.
• The tides coming in—from all sides. Underpinning much of Asia’s continued success is the fact
that this region singularly continues to extract economic benefit from growth in the rest of the
world. Global trade continues to be Asia’s life-blood, yet while advanced economies (the US, Japan
and Europe) will continue to be the biggest suppliers, it is actually demand from within emerging
Asia, coupled with other fast-growing emerging regions such as Africa which will sustain its growth
trajectory.

Zeros, and/or heroes
The drivers and direction of Asia’s economies are coming under increased scrutiny by global investors
in 2014. Emerging Asian markets are being questioned for their lack of structural integrity, and a
persistent opacity in their political and regulatory environments. By contrast, rich-but-stagnant
advanced economies are increasingly attractive to global capital as their economies finally get back on
track. In Asia, this renewed confidence has focused on Japan; the world’s third-largest economy has,
after decades-long stagnation, been jolted back to life with decisive policy reform and corresponding
market enthusiasm.
In many respects, it appears that enthusiasm for rich world markets is informing (perhaps even
intensifying) distain for emerging markets. Whereas a decade ago exuberant acronyms, such as BRICs
and CIVETS, were coined to create taxonomies of growth market opportunity, today EMs are clustered
according to their common failings: hence the newly-formed “Fragile Five” economies, an aggregate of
current account-indebted countries with exacerbated risk to hot-money flows. (This grouping includes
India, Indonesia, South Africa, Turkey and Brazil; Argentina might be added a ‘Sick Sixth’ were it not
for the fact that unlike the others, the Latin American economy has been a well-known, decades-long
disappointment). Much of that hot money has flowed ‘back’ to the US and other advanced economies,
the S&P alone rose by nearly a third in 2013, its best performance in over 15 years.
Yet, this is far from a zero-sum game. While many emerging economies do suffer from expanding
current account deficits, persistent inflation and crushing infrastructure deficits, many more continue
to push millions of new consumers into the middle classes, and their corresponding aspirational
spending continues to sustain domestic consumption levels across Asia. The Economist Intelligence
Unit estimates that emerging Asia will see its economies collectively grow 5.6% in 2014 at PPP rates—
roughly twice as fast as the world as a whole (see Figure 1). Moreover, it is growth within and between
emerging market regions that is becoming increasingly relevant to global trade, and while confidence
has returned to the ‘rich’ world, there are still concerns. Japan’s robust economic recovery slowed
significantly by the end of 2013; fourth quarter GDP growth rates were a respectable but unexciting
Figure 1
Regional GDP and growth rates, 2013-2015
(in US$trn, at purchase price parity)
Source: The Economist Intelligence Unit
2013 2014 2015
-1
0
1
2
3
4
5
6
7
8
Asia China EU India Indonesia Japan Latin America Africa US World

1%, and while Japan’s export levels continue to grow slightly, their core driver is in fact robust demand
from emerging Asian trading partners.
The speed with which global capital fled EMs—figures from the Institute of International Finance
suggest that some US$100bn flowed out of emerging market funds over the course of 2013, perhaps
a fifth of their total value. This suggests that quite a bit of that money was punching above its ‘actual’
risk tolerance levels. This is perhaps because capital markets in advanced economies (frozen at zero-
level interest rates for so long) have had no choice but to go off-piste in search of yield. Most of the
major developing economies struggled in 2013 as the Fed signalled its intentions to reverse its bond-
buying programme, which had depressed interest rates on safe-haven US investments and pushed
investment capital into riskier assets, many of them in emerging markets. The prospect of tighter US
monetary policy has lifted US and European interest rates, altering the risk-reward ratio for investors
and redirecting capital from emerging markets back to advanced economies.
The outflows have exposed recent GDP growth in some emerging markets as more ephemeral
than fundamental, leaving many of them open to a familiar set of problems: too much lending, too
much inflation and too few economic reforms. In response, many of these economies have begun
raising interest rates, which will further curb economic growth. As the Fed continues to wind down
its monetary stimulus programmes, more capital could leave emerging markets. This sequence of
events has also caused a great deal of finger-pointing in the monetary policy community: the Fed’s
intentions and Abenomics have both been blamed (the Fed definitely more so) for creating and
exacerbating current developing country market turmoil. India’s central bank governor suggested
that the withdrawal of US monetary stimulus was unfairly punishing emerging economies. The
governor added that the US and other advanced economies needed to restore cooperation by assisting
the emerging world (which had a large role in lifting the global economy out of its 2008 recession).
Perhaps as evidence to the extent of the underlying volatility, the response from advanced economies
has been just as pointed: UK finance minister George Osbsorne recently deflected the blame back onto
the impacted economies, in a speech he gave in Hong Kong (in advance of a G20 Summit), arguing
that EM’s own fundamentals, particularly their current account deficits, needed to get their own
houses in order. (This is somewhat ironic, given that, outside of the ‘Fragile Five’, emerging market
fundamentals are largely in pretty good nick: out of 25 such economies tracked by The Economist, only
two have current account deficits in excess of 5%.)
The rising temperatures of policy makers aside, mature markets have clearly and quickly benefited
from the confluence of good economic data, rising investor confidence and a better-understanding of
market conditions. The US is once again the strong man of the developed world, thanks to a resurgence
in employment which has reinvigorated the almighty American consumer, which has started spending
and paying down debt as a result: the Federal Reserve reports that the ratio of US household debt
to disposable income levels have dropped to just over 100% (it was at 126% in 2007, at the Global
Financial Crisis’ dawn). This should help the US economy achieve 3% GDP growth this year.
Global output will climb this year, largely because of the recovery in the advanced economies, hit
hardest during the Great Recession and have taken the longest to bounce back. The global economy in
2014 will grow by 2.9% at market exchange rates, the best showing since 2010. If our 2014 forecasts
for the US, the euro zone and Japan hold, these three economies—which will collectively account

for about US$35trn in nominal output this year, just under half of the global total—will experience
their first synchronised full-year upturn since the 2010 bounce-back from the recession. Even the
aforementioned headwinds from emerging markets will not significantly impact the outlook (and
will likely not materially slow emerging Asian growth at all). Overall GDP growth among the OECD
economies is forecast at 2.4% in 2014, more than a full percentage point higher than last year. And
while the US leads the way, the Economist Intelligence Unit is also encouraged by the recovery in
the euro zone, where surveys of manufacturing, services and employment—even in the beleaguered
periphery—are improving, and add confidence to a 1.1% growth forecast in the single-currency bloc
this year. Japan’s resurgent sluggishness notwithstanding, it too will see 1.7% GDP growth this year,
similar to last year’s rate—but far higher than any other year in the past two decades (barring the 2010
bounce-back from the Fukushima tsunami and nuclear power crises).
Yet, if global capital has not shed its risk profile, it still must square it with a world economy
where the most consistently speedy growth comes out of emerging markets. China’s economy (as
will be discussed below) is slowing, but at a rate which is not only well-orchestrated, but extremely
incremental. By 2018 the EIU believes annual GDP growth in China will drop to 6%, meaning that
China will still be growing at twice the speed of the US economy in five years time—and will likely be,
at roughly US$15trn, as large, if not larger, than America. It is this growing parity between the US and
the Chinese economies that informs global business sentiment: The Economist/FT Global Business
Barometer (a quarterly survey of 1,500 executives worldwide) found, in the first quarter of 2014, a
(slight) majority of respondents felt that the US would deliver more growth to their business than
would China. Overall business confidence levels between North America and Asia are uniformly high—
and at their highest levels in three years (see Figure 2).
A recalibration of market opportunities emerges as a result, and this has important implications for
Asian economies, as well as investors seeking yield from them. It requires a firm to understand not only
emerging Asia’s demographics, but what the implications of their shifts will be. Markets appear to be
taking into account ageing demographics in Japan and China and the impact on cost and productivity,
Figure 2
Growth contribution by market in 2014, and overall business confidence by region, 2Q2011-1Q2014
52.2 47.8
ChinaUS
Source: The Economist/ FT Global Business Barometer
-40
-30
-20
-10
0
10
20
30
40
50
1Q
2014
4Q
2013
3Q
2013
2Q
2013
1Q
2013
4Q
2012
3Q
2012
2Q
2012
1Q
2012
4Q
2011
3Q
2011
2Q
2011
World AsiaNorth America
(% of respondents) (net % of respondents indicating business conditions are improving)

Figure 3
Dependency ratios by country, 2014 and 2030
0
20
40
60
80
100
Source: The Economist Intelligence Unit and the Economist Corporate Network
2014
2030
Vietnam
Taiwan
SriLanka
South
Korea
Singapore
Philippines
Pakistan
New
Zealand
Malaysia
Japan
Indonesia
India
HongKong
China
Australia
but what happens when youthful South-East Asia quickly turns grey over the next generation (see
Figure 3)? Global life insurance firm Prudential suggests that for every 1m new Indonesian workers
added to the payrolls of the world’s fourth-largest country, another 1m will age into retirement. It took
the US economy some 50 years to substantially ‘grey’, from the point where 10% of its population was
retired, to 20%. China will reach that point very soon, and will have completed that journey in 21 years.
Indonesia will hit that point perhaps in 19 years—but will only take 19 years in total to do so.
Bigger, better…but not all alike
Emerging Asia’s swiftly tilting demographics, as with other aspects of its varied market fundamentals,
may be globally unique in their speediness, but are symptomatic of a central challenge facing global
investors: all EMs are neither equally sound (or fragile) opportunities, nor are they developing at
similar rates. This demands a crisper framework for evaluating emerging market fundamentals.
Currently, market size and speed of growth are all that matters to the yield-thirsty, and the quest
for this narrative has attracted global investors in recent years to the velocity of Asia’s big emergers
such as Indonesia and Vietnam, and this focus may blind them to dangerous weaknesses, such as the
aforementioned exposure to changing capital and trade flows.
Another persistent issue in emerging markets generally, and Asia specifically, is the threat of social
instability arising from growing income inequality. This is ironically unfortunate in Asia, for by most
traditional measures Asia’s economies seem to have waged an effective war on poverty. China, for
instance, has taken moved 70% of its people over the poverty line since the opening of its economy
in 1981 (and perhaps a third of its population has then gone on to join the middle class). India’s
percentage of poor has also steadily shrank during that time—but according to World Bank data, the
percentage of people living at or below its defined poverty line, of US$1.50 a day, is still over 32%
(only Laos has a higher percentage), implying some 387m Indians still live in poverty, a number that
only began shrinking in absolute terms in the last decade. Persistent poverty in emerging Asia has
coupled with rapid economic expansion to actually accelerate income inequality, despite the increase
in wealth overall: except for two countries (the Philippines and Thailand), all Asian economies have

seen increases in their Gini index scores (a measurement of wealth distribution in a country, which
expresses the degree of income disparity; a score 0 implies complete equality, and 100 implies
complete inequality), on average five points over the last two decades. China’s economy, fully five
times larger than it was in 1990, saw the largest rise (nearly 10 points) in its Gini index in that time.
Few other countries globally have experienced similar rises—although, in yet another parallel of the
two economies, the US is one.
Yet despite persistent and deepening inequality, many of Asia’s poorer markets have domestic
market growth which far outpaces its peers in other parts of the world. This in many markets creates a
counter-narrative to the social exclusion story. Take Indonesia, which in many ways is quite different
from that of other ‘fragile five’ economies. Last year’s relatively large current account deficit of 4%
of GDP contributed to the world’s rediscovered pessimism about the place, and sent its stock markets
and currency into tailspins. The rupiah is still worryingly low, and Indonesia’s central bank has raised
interest rates faster than any other emerging Asian country in the last year as a result). Thanks
to these prudent torques of its lending rates and commitment to reducing persistent drags on its
current account (particularly politically popular but financially disastrous fuel subsidies), Indonesia
managed to half its current account deficit by the end of last year, and within the first two months of
2014, foreign funds have once again become net buyers of Indonesian equities. And while currency
lurches have accelerated inflation and with it rate hikes, both of which have taken a toll on consumer
spending, Indonesia’s policy game-plan has included other tactics to keep consumption buoyant, such
as the roll-out this year of what is reckoned to be the world’s largest universal health care program; the
country is subsidizing premiums for its poorest to the tune of US$1.6bn annually (a lot, but less than a
tenth of what it currently spends on fuel subsidies).
This proactive and multi-faceted policy management has worked: the Indonesian consumer has
actually been leading the world in consumer confidence for each of the last four quarters. According
to consumer research firm Nielsen, Indonesian consumers have scored highest on their Global Survey
of Consumer Confidence. And while the global confidence level has stayed flat (albeit high) for a year,
Asia’s is the only region that has consistently posted gains. Throughout Asia, emerging economy
Figure 4
Consumer confidence indexes, 2010-2013
(indexed to 2010 = 100, or rebased accordingly)
Source: Haver Analytics, the Economist Corporate Network
90
96
102
108
114
120
20142013201220112010
10
20
30
40
50
China South Korea Indonesia (left-hand side) Japan Thailand (right-hand side)

consumers have been buying—and saving—steadily, and their buoyant outlook has been a key driver of
both global and regional trade growth (see Figure 4).
Emergers are doing it for themselves
In fact, there has been a perceptible shift in the pattern of trade among emerging markets in the
past decade, and this trade accelerated even further during the Financial Crisis. Amongst the major
drivers are Asia’s powerful growth, mostly on the back of the rise of China, and rising wealth in
south and south-east Asia, which has fueled a growing demand for infrastructure, and for resources.
Increasingly, this has meant that Asia trades more with itself: since 2008, the percentage of China’s
exports to the rest of emerging Asia has grown from 9% to roughly 14% of its total, while its trade with
advanced economies has stayed flat or shrank in percentage terms (see Figure 5). Asia’s trade with
Figure 5
China’s export value by region, 2007-2013
(US$bn)
0
20
40
60
80
100
2013201220112010200920082007
EU Africa USA Developing Asia
Figure 6
Emerging Asia export value to advanced and emerging economies, 2000-2012
(US$bn)
China’s import and export value to Africa and the Middle East, 2000-2012
(US$bn)
0
500
1,000
1,500
2,000
2,500
2012201120102009200820072006200520042003200220012000
other emerging regions, driven by similar consumption trends, has also accelerated. Developing Asian
economies have, since 2000, seen the proportional value of its trade with the rest of the emerging
world (including itself) double, to 38% of its total export value; China’s two-way trade with the Middle
East and Africa over that time also doubled, and now accounts for 9% of its total value (see Figure 6).

Still got some heat on it (and in it)
China’s growth continues to moderate, yet observations that China’s slowing economic progress is
systematic of its eventual collapse are clearly overstated. As one point of counter-evidence, there
are the enormous, obvious (and surprisingly transparent) efforts of the Chinese government to
engineer a complex and thorough re-orientation of its economic growth drivers; away from the capital
investment which has fueled productivity gains in its export-oriented manufacturing sector for nearly
a quarter century, and towards a domestic consumption-led economy a la the US, and indeed most
other emerging Asian economies. The primary means of engineering this shift—frog-marching China’s
economy up the value chain—signals a willingness on China’s part to accept profound changes in the
way it competes globally.
Ironically, however, it has not actually had to. It is true that wages haves growth at three times the
Asian average for nearly two decades—yet the fact that labour costs in China’s factories practically
double every five years has not caused its export manufacturing sector to collapse. Investments in
robotics, software and other non-labour-based productivity enhancements have been coupled with
a slight shift of production to less expensive inland provinces. As a result, China is having its cake,
and eating it too. China’s garment manufacturers (the apparel industry being a bellwether for where
‘cheap’ production gravitates) exported US$90bn in value in 2012, more than 50% higher than they
did in 2007. At the same time, the majority of China’s exports are now classified as ‘high value’, and an
increasing amount of that productivity is indeed consumed at home: China’s domestic consumption as
a percentage of GDP is now above 36%. This is still far lower than the Asian average, which is north of
50%, but China’s consumption proportion steadily grows by a percentage point a year.
Recently, a new bogeyman has been discovered by global investors, in the form of a perceived
mounting local government debt crisis. While ‘local government’ is something of a misnomer, in
terms of perspective (Guangdong’s economy alone is roughly the size of Indonesia’s), there has
been a perception that profligate borrowing by provincial and municipal governments to fund pet
infrastructure projects is stretching the capacity of the country’s financing system, and is adding
non-performance risk on a massive scale. It doesn’t help that at the end of 2013, China’s national
auditor revealed a rising debt problem among the country’s local government provinces. Debt grew to
China’s import and export value to Africa and the Middle East, 2000-2012
(US$bn)
0
500
1,000
1,500
2012201120102009200820072006200520042003200220012000
0
20
40
60
80
100
120
2012201120102009200820072006200520042003200220012000
Africa
Middle East

RMB10.9trn (US$1.8trn) by the middle of last year, and was expected to go up a further RMB17.9trn
if various debt guarantees were added. Although the level of debt, equivalent to about a third of
China’s GDP, is enough to raise concern, it is unlikely to derail the system, for two reasons. Certainly,
much municipal lending is going into boondoggles and wasteful projects, but much more is going
into core infrastructure efforts, particularly in central and western China, which will enable further
growth. It is fun to make reference to Mongolian ‘ghost cities’, or send smartphone photos of dark-
windowed apartment blocks from one’s taxi in from Pudong Airport. But when China’s urban housing
and infrastructure needs are put in perspective—roughly a million and a half Chinese move into its
cities every month, and likely will for 20 more years—is it more likely that most of these apartments will
fill up in due time. The second reason is much more pragmatic: a stability-loving, and liquid, central
government in Beijing will willingly step up to help tidy up any fiscal mess that may be created by local
provinces.
In the main, therefore, China’s future steady growth is a sure thing (even if, in recent weeks,
the ‘one-way bet’ of renminbi appreciation has not been). Thus, investment capital is still flowing
healthily in (see Figure 7) China’s US$10.76bn tally of January inbound FDI—though only half of what
Facebook paid for curiously popular mobile chat service WhatsApp—is up over 16% over last year’s
levels. Significantly, inflows from other East Asian economies grew faster still—collective levels from
Korea, Japan, Hong Kong and Taiwan grew 22%, despite simmering regional tension.
Figure 7
China’s FDI inflows, 2000-2013
(US$bn)
Source: Haver Analytics
0
30
60
90
120
150
20132012201120102009200820072006200520042003200220012000

Tempest Fugit
One investor’s reaction to breaking news or fresh economic data is another investor’s over-reaction.
There surely have been disconnects between market movements and economic fundamentals over
the past three quarters, but as discussed above, much of the degree of variance can be understood by
considering the tremendous change in the conditions of the world’s advanced economies, rather than
substantial evidence that emerging market fundamentals have changed. Many emerging markets,
even those considered ‘fragile’ in today’s terms, have robust domestic consumption stories, a thirst for
economic-enabling infrastructure, and increasingly muscular fiscal policy infrastructure to guide them
through storms. And the majority of these ‘good’ emerging markets are in Asia.
Which is not to say that there are not good reasons to be skeptical of the EM narrative: As
mentioned, social and political instability is a constant threat, one that ironically increases as
developing countries grow faster; again, this means much of the threat to stability arising from
inequality will be felt by Asia’s speedy emergers. Market opacity, largely in the form of still-pernicious
corruption and bureaucracy, continue to plague emerging Asia and keep growth arguably several
percentage points slower than it should be. (It is no coincidence that one of Asia’s best economic
performers in 2013 was the Philippines—the Economist Corporate Network’s annual survey of its
members found its business environment ranked second-best improved, after Myanmar—and much of
this has to do with the current administrations efforts to unravel red tape and dismantle patronage
systems.)
It also is not to say that what plagues emerging markets does not negatively impact the advanced
economies, either. In the end, it is the fact that the global economy is continuing to grow as an
interconnected system, of goods and capital that is preserving growth for all participants. The current
post-Taper emerging market scares may be a momentary flare-up, but they do point out the two most
critical factors in any domestic economy’s (rich or poor) success: active participation in the global
economy, and the willingness of global players to remain active participants in its own domestic
market.

Beijing, Hong Kong, Kuala Lumpur, Shanghai, Singapore, Tokyo
For enquiries, please contact us at cn@economist.com
Or follow us on Twitter @ecn_asia
About Economist Corporate Network Asia
Economist Corporate Network (ECN) is The Economist Group’s advisory, briefing and
networking service for Asia-based senior executives seeking insight into economic and
business trends in key growth markets. Through a tailored blend of interactive meetings,
high-calibre research, and private client briefings, ECN Asia delivers country-by-
country, regional, global and industry-focused analysis.

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