News 15
moneyweek.com 8October 2021 MONEYWEEK
Taipei
Taiwanunnervedby
Chineseaggression:
Taipeihaswarnedthat
Chinacouldinvade
Taiwan,itsfirstclear
messagethatthecountry
“facesathreatofwar”,say
KathrinHilleandDemetri
Sevastopulo in theFinancial
Times. DefenceministerChiu
Kuo-cheng(pictured) issued the
warningafter nearly 150Chinesewarplanes
operatedinthe internationalairspacenear
Taiwan betweenFridayand Monday. “Ifthey
wantto attack now, they arealready capable.
Buttheyhavetocalculate at what cost it
wouldcomeand what resultsitwouldhave,”
Chiu said,following pleasbyTaipeitothe
internationalcommunity to supportitagainst
“Chinese aggression”. Hesaid Taiwan’s army
wasnot readyfor “full-scaleconflict”.US
presidentJoe BidensaidonTuesday
he hadbeenspeakingtoChina’s
president Xi Jinpingand that both
hadagreedtofollowthe “Taiwan
agreement”,saysReuters. It acquiescesto
Beijing’sinsistencethatthereis only one
Chinaaslongasitmaintains apeaceful
relationship with Taipei.The USsaid it
wouldcontinuetohelpmaintainTaipei’s
defencesand urgedChinatorefrain from
military activity.Hanoi
Vietnam’seconomyshrinks:Vietnam’seconomyshrank by 6.2%
year-on-year in thethird quarterbecause of Covid-19 restrictions.
Thethree monthsbetween JulyandSeptembercoincided with the
peak of thecountry’s Deltawaveofthe virus, whichhas closed
factoriesand businessesand seen touristsbannedfromvisiting. The
contractionmarks thefirst quarterlyfall in Vietnam’sGDPsince
theyear2000.The AsianDevelopmentBankrecentlyslashedits
full-year2021growthoutlook forthe countryto3.8%from6.7%.
Still,“theworst is over”, saysChua HanTeng of DBS. Improving
virusnumbers areallowingauthorities to reopen manufacturing
sites. Foreign direct investment (FDI)isa“keyengine” of Vietnam’s
growth outlook:newly registeredFDI of $12.5bninthe firstnine
monthsof2021was up 21%onayearbefore. Thecountry is an
attractive location as multinationals look to diversifysupplychains
beyond China. Vietnamisthe world’ssecond-biggestexporter
of mobilephones andproduces7. 5%of internationallytraded
furniture, notesGarethLeather forCapital Economics. Factory
shutdownshaveexacerbated global supply-chain woes.Just11%
of thepopulation hasbeenfully vaccinated,one of thelowestrates
in theregion. “Ifcases starttorise againand hospitals comeunder
renewedpressure, restrictions mayneedtobereimposed.”
Manila
Duterte teps down:Philippine presidentRodrigo Duterte
(pictured)has announced that hisdaughterwillberunningfor
president in the2022election, says Reuters. Sara Duterte-Carpio is
currentlymayor of thecountry’s third-largestcity, Davao, andhad
previouslysaidshe wouldnot seek national office.Duterte
declared that he wasretiringfrompoliticslastweek.Heleaves
abloodylegacy: hiswar on drugshas killed over 6,000people
accordingtothe officialdata, says Nikkei Asia.The real number is
likelytobemuchhigher.His “aggressive”infrastructurepush
wasworth over $160bn andwas praisedfor helpingmaintain
economic growth over 6%before thepandemic. State
infrastructurespendingrelativeto GDPalmostdoubled in thesix
yearshewas in power, underpinning growth.But hispandemic
response “stained hiseconomiclegacy”:hereliedonretired
generals whoenforcedextendedlockdowns.
Theseshrankthe Philippineeconomyby
9.6%lastyear,the worstcontraction in
SoutheastAsia.Growthisnot expected
to return to pre-pandemic levels until
theend of 2022,makingthe country
“the laggardinAsia”.Brussels
Inflationarypressurebuilds:Europe’srecoveryisfuelling
inflation.Googledatashowsthat“Europeansareleavingtheir
housestogoshopping,eatout,travelandvisitcinemasasmuch
astheydidbeforethepandemic”,thankstohighCovid-1 9
vaccinationrates,saysValentinaRomeiintheFinancialTimes.
Greaterconsumerconfidenceiskeytothebloc’seconomic
recovery:“consumptionaccountedfor 1 .9%oftheeurozone’s
2.2%growthinthesecondquarter”.Thatisrevivinginflation.
Germaninflationhita 2 9-year-highof4.1%lastmonth,saysMartin
Arnoldinthesamepaper.Thecountry’sworkersaredemanding
higherpayacrossthetravel,bankingandpublicsectors.Some,
suchasemployeesatmotorhomebusinessCarthago,havegone
onstrikeforbetterwages.Risingwagedemandswillonlypush
inflationhigher.InBerlin,politicianshavemovedastepcloserto
formingacoalitiongovernmentfollowinglastmonth’selection.
TheGreensandthepro-businessFreeDemocratshaveagreedto
holdtalkswiththeSocialDemocrats(SPD).Europe’sincreasinglyconfidentconsumersaccounted
forthelion’sshareofsecond-quartergrowth