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Stacie Nevadomski Berdan: Living Abroad Has Its Challenges

by on November 16, 2010

Living in a foreign country excites the imagination, ignites the adventurous spirit, and inspires you to explore. It can also scare the pants off you. Learning to live in another country is more than simply learning to get to the office, making yourself understood in a local language, and eating different food. You have to learn how to do many new things while unlearning old that have become second nature. You must accept your new home on its terms — not yours. Living abroad successfully also involves a subtle but important change in your expectations of yourself and others. More importantly, you have to cope with the loss of identity and familiarity and get along without some of the personal perks in your life that provide encouragement, meaning and fun ! And so every now and then when I read a piece about an expat sent abroad who discovers that “it’s not what I expected” or the spouse gives an ultimatum “me or the job” as noted in this article on ” What To Do When Relocating Abroad ” in Forbes , I’m baffled. Was it the allure of Paris? Didn’t anyone tell the spouse that although there may be opportunities to ride in Paris — similar to those in New York City — but that it’s not the wide open grasslands of Texas? With the sheer cost involved, both financial and human capital, why are companies still making mistakes in choosing employees and not working with both the employee and spouse/partner to make sure it’s not a career buster? Most of the large corporations I consult with on global relocation and cross-cultural management issues have wised up to the importance of preparing professionals. So, too, are employees. Although a stint abroad can do wonders for fast-tracking your career as I wrote in my book Get Ahead By Going Abroad , it can also be a career buster if you turn down an assignment, leave early, or don’t adapt or adjust to deliver for the company. According to HR professionals I’ve worked with, a spouse’s reaction to the relocation is the number one reason such international transfers are successful or not; a spouse’s happiness is critical to your ability to do your job. I know. My husband was a “trailing spouse” — a terrible term — when we moved to Hong Kong years ago. He left a job as a researcher/writer at Washington, D.C.-based environmental think tank to follow me and my career. He had rough ride at first, trying to find a job working on environmental issues (no green movement in sight at the time) and so he reinvented himself as a travel writer. It was a great gig that took him all over Asia spending time in the Kingdom of Brunei, watching the orangutans in the forests of Borneo, and biking through most major cities in China. But he had to make it work. He did it for me and, when my three years was up, he asked that I not extend or move on to Tokyo or Kuala Lumpur. I agreed despite my desire to continue globetrotting. I grew to appreciate that because we had left our network of family and friends behind, the two of us became everything to each other, which was a bit overwhelming. Moreover, it’s usually even harder on the spouse because the employee has work, colleagues, activities — an instant culture into which to assimilate. A partner has to begin everything from scratch — that’s tough enough with an in-country relocation and even harder in another culture, possibly even a second language. But we can learn from others. In Get Ahead By Going Abroad , I interviewed more than 200 professionals who moved abroad, soliciting common advice on issues critical to a successful stint working abroad. One of these is to make sure that you and your spouse take a look-see trip if at all possible. Imagine yourself living there, how would your life fit into your new home city. What would be different, perhaps the same. And then, once you move, another critical piece of advice involves how to handle your first week on the ground because many times this first week sets the tone for the overall experience, kind of like first impressions; they’re hard to get over. To enhance a great first impression, make sure you do the following six important things the first week on the ground without going into the office, if at all possible: Nail down your personal must haves , be it a gym, a massage therapist or a particular brand of coffee, appreciate the importance of those “little things.” Make contact with at least one other international contact , who can be an on-the-ground source of information and assistance. Make sure you have at least one local contact because sometimes only local help will do. Familiarize yourself with the transportation system be it your own car, the subway or a system of commuter trains. Set up house with the clothes you have, photos and stock the fridge to begin to make it like home. Explore your new home , get a feel for the place, stroll the streets, be a tourist. But it doesn’t stop here. There’s practical advice on the first month, the first year and so on — even practical and tried-and-true tips on ensuring a successful return. Others have done it and successfully. Why not profit from their experiences to ensure the best outcome for your international assignment. It could be the difference between fast-tracking your career and fast-talking to save it.

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Stacie Nevadomski Berdan: Living Abroad Has Its Challenges

Video: Indonesia’s Natalegawa Discusses South China Sea Dispute: Video

by on September 21, 2010

Sept. 22 (Bloomberg) — Indonesian Foreign Minister Marty Natalegawa talks about territorial disputes in the South China Sea. China signaled for the U.S. to stay out of disputes over the sea, three days before President Barack Obama is due to meet with regional leaders concerned over China’s territorial claims in the oil-and gas-rich waters. Portions of the South China Sea are claimed by Vietnam, the Philippines, Malaysia, Brunei and Indonesia. China claims almost the entire sea. Separately, China and Japan are locked in a diplomatic dispute centering on conflicting territorial claims in the East China Sea. (Source: Bloomberg)

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Video: Indonesia’s Natalegawa Discusses South China Sea Dispute: Video

China, U.S. Blame Each Other for Severed Military Ties Amid Korea Tensions

June 5, 2010

By Daniel Ten Kate June 5 (Bloomberg) — The U.S. and China blamed each other for a freeze in military ties sparked this year by American plans to sell arms to Taiwan, highlighting a divide that’s hampering efforts to resolve tensions on the Korean peninsula. China’s reaction to the proposed sales “makes little sense” and threatens regional security, Defense Secretary Robert Gates said in Singapore at a meeting of defense officials from 28 countries. The deals “should come as no surprise” since they have been taking place for decades, he added. “It is not the Chinese side that has set obstacles to military-to-military ties,” General Ma Xiaotian, deputy chief of general staff of the People’s Liberation Army, told the IISS Shangri-La Dialogue after Gates spoke. “We do not regard U.S. arms sales to Taiwan as something normal.” The strained military ties come after China last month declined to endorse an international investigation that concluded North Korea was responsible for the sinking a South Korean warship in March, a finding that prompted Kim Jong Il ’s regime to threaten “all-out war.” South Korea referred the matter yesterday to the United Nations Security Council, where China has veto power. “There is a real cost to any absence of military-to- military relations,” Gates said. “They are essential to regional security.” Patriots, Blackhawks The weaponry Taiwan plans to buy includes advanced Lockheed Martin Corp. Patriot missiles valued at $2.8 billion, United Technologies Corp. UH-60 Blackhawk helicopters worth $3.1 billion, and Boeing Co. Harpoon missiles costing $37 million. Gates said the sales are “nothing new” and the U.S. doesn’t support independence for Taiwan, which China considers a renegade province that should be reunited by force if necessary. Gates said China’s military buildup was largely targeted at Taiwan, a statement Ma rejected. The general said that “functional exchanges” with U.S. officials were ongoing even as high-level visits were “temporarily suspended.” “We hope that through all these exchanges and through a certain period during which we can both calm down and engage in cool-headed discussion, we can resolve the problems and lay a foundation for our relationship to move on,” Ma said. “Only on this basis can China-U.S. relations, which are important to all, become more mature.” South China Sea Gates said today the South China Sea, stretching from Singapore to the Strait of Taiwan, is an “area of growing concern.” China told some international oil and gas companies to halt exploration in offshore areas that Vietnam considers part of its territory, a U.S. official told Congress last year. “We object to any effort to intimidate U.S. corporations or those of any nation engaged in legitimate economic activity,” Gates said today. Exxon Mobil Corp. and BP Plc are among companies that have halted projects in the sea because of China’s objections, according to U.S. government agencies. China, Vietnam, Malaysia, Brunei, the Philippines and Taiwan have claims to all or part of the oil-rich Spratly Islands in the South China Sea. Chinese Premier Wen Jiabao has refrained from condemning North Korea for the March 26 sinking of the Cheonan warship that killed 46 sailors, calling instead for measures to ease tensions in the region. China is North Korea’s largest trading partner and main political ally, having fought alongside the North and against the U.S. in the 1950-1953 Korean War. China’s preference is for six-party talks to be resumed to resolve “the latest incident” with North Korea, Ma said today, referring to discussions involving the two communist nations, South Korea, the U.S., Japan and Russia. North Korea Options Gates said the U.S. will conduct combined military exercises with South Korea and support action in the United Nations Security Council to pressure North Korea. “At the same time, we are assessing additional options to hold North Korea accountable,” he said in Singapore. Gates declined to elaborate on the options when asked later. South Korean President Lee Myung Bak , who yesterday warned North Korea it would “suffer the consequences” if officials didn’t apologize for the attack, told business leaders in Singapore today there was “no possibility of a full-scale war” between the neighbors. The U.S. is South Korea’s “staunchest ally,” Lee said yesterday, when he also called for China to support his government’s efforts to censure North Korea for the attack. The 28,500 U.S. troops in South Korea “are well prepared to deter aggression,” Lieutenant Colonel Angela Billings, a spokeswoman for U.S. forces in Korea, said last month. To contact the reporter on this story: Daniel Ten Kate in Singapore at dtenkate@bloomberg.net

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Malaysia, Brunei to co-develop joint oil fields

May 2, 2010

Malaysia, Brunei to co-develop joint oil fields

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Vietnam Lures Intel, Samsung as Asean Group Woos Companies Away From China

April 7, 2010

By Daniel Ten Kate April 7 (Bloomberg) — Vietnam hosts Southeast Asian leaders this week as chair of their 10-nation bloc, shining a spotlight on the political and economic stability that prompted Intel Corp. and Toyota Motor Corp. to increase investments. The communist nation drew 13.5 percent of the Association of Southeast Asian Nations’ foreign direct investment pool in 2008, up from 4.4 percent two years earlier, according to the 10-member group. And its allure may be rising, judging from a December survey by the American Chamber of Commerce in Shanghai. Vietnam is a preferred destination for businesses looking to relocate from China, Asia’s biggest investment recipient, the report said. “A lot of companies from a strategic standpoint are looking at how to set up a production facility within Asean,” said James Lockett, a Hanoi-based lawyer with Baker & McKenzie LLP and a board member of the American Chamber of Commerce in Vietnam. “In a lot of product areas, Vietnam looks very, very attractive for people who are doing that.” Vietnam’s economy expanded 5.2 percent last year, the most in Asean, which has signed free-trade accords with China, Japan, South Korea, Australia and New Zealand. The deals give companies access to those countries and the Asean member states of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Asean is home to about 600 million people and its populations are among Asia’s youngest. Asean leaders meeting April 8-9 in Hanoi will issue a statement on climate change and define a “road map” to form an economic community modeled on the European Union by 2015. In March, Asean trade ministers said they would travel to the U.S. to promote the group as an economic hub. Obama Visit The region’s growing economic importance was underscored when President Barack Obama became the first U.S. leader to meet formally with the bloc in November. Santa Clara, California-based Intel, the world’s biggest chipmaker, is scheduled to open a $1 billion testing facility in Ho Chi Minh City this year that will employ about 4,000 people. Intel chose Vietnam because of its proximity to customers, reliable power and water supply and skilled workers, said Nick Jacobs , Intel’s regional spokesman. “Vietnam is a country which is very committed to education, and that gives us confidence we will continue to attract the talent we need for long-term success,” he said. Toyota produced 28,000 vehicles in Vietnam last year, up from 18,000 in 2007, spokesman Paul Nolasco said. The Toyota City, Japan-based company had 1,300 employees in Vietnam, more than double the number in 2005, he said. ‘Potential Growth’ “Toyota recognizes not only the potential growth of that market but the potential role the Vietnamese economy can make in broader Southeast Asia,” Nolasco said. Toyota produced more than 6 million vehicles globally in 2009. Suwon, South Korea-based Samsung Electronics Co., the world’s second-biggest maker of mobile phones, opened a $1 billion factory in Vietnam six months ago. Redmond, Washington- based Microsoft Corp. outsources digital animation and modeling for its computer games to Vietnam. While Vietnam’s one-party state and its jailing of more than a dozen democracy activists since October have drawn criticism from groups like Human Rights Watch, some regard it as a model of stability. They contrast it with Thailand, where demonstrators have shut airports and blocked streets in sometimes violent political protests. ‘Political Stability’ “There is a measure of political stability” in Vietnam, Rodolfo Severino , Asean’s former secretary-general, said by phone from Singapore. “If I were an investor I would bet my money on it.” The number of foreign companies in China with plans to relocate plants inland or outside the country because of rising costs doubled last year, according to a survey of 202 foreign manufacturers by the American chamber. The poll found 8 percent of respondents reported plans to relocate or expand outside of China compared with 28 percent considering moves to lower-cost areas in southwest or central China. In the short term, Vietnam’s inflation rate, among the world’s highest, caused the country to fall last year in the World Economic Forum’s Global Competitiveness Report . Consumer prices rose 9.46 percent in March, the biggest gain in a year. Fitch Ratings placed Vietnam’s debt rating on a negative watch last month. Vietnam “has been making positive structural changes to increase its investment attractiveness,” Prakriti Sofat, a Singapore-based economist for Barclays Capital, wrote in a report last month. Rising Yuan Banks such as Goldman Sachs Group Inc. predict China will allow its currency to appreciate amid pressure from U.S. lawmakers, reducing its attractiveness to exporters. The yuan will rise to 6.66 per dollar by the end of September, New York- based Goldman said in an April 1 research note. While some CEOs in China have called for a stronger yuan, its rise would trim profit margins of exporters and push textile and furniture makers into bankruptcy, Zhang Wei , vice chairman of the China Council for the Promotion of International Trade based in Beijing, said March 18. Vietnam’s dong has fallen 7 percent against the dollar in the past year. To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

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Obama Trip May Alter U.S. Misperception of Asean, Economic Ministers Say

February 28, 2010

By Daniel Ten Kate March 1 (Bloomberg) — President Barack Obama needs to grasp Southeast Asia’s economic potential and help boost U.S. investment when he travels to Indonesia three weeks from now, economic ministers from the region said. “There’s still a lack of awareness in the U.S., a misperception that we have to address,” Indonesian Trade Minister Mari Pangestu said in an interview in Putrajaya, Malaysia, where envoys from the Association of Southeast Asian Nations met at the weekend. “We have to keep up the momentum” to expand cooperation, she said. Asean ministers plan to travel to the U.S. in May to meet with business executives. The association plans to showcase its position as an economic hub in competing for funds with China and India, the world’s fastest-growing economies. Obama, who became the first U.S. leader to meet with the 10-member bloc in November, is aiming to increase trade with Asia to help meet a January pledge to double exports in five years. Southeast Asia was the third-biggest market for U.S. goods in 2008 behind Canada and Mexico. The region is rich in coal, oil and precious metals as well as containing sea lanes vital to world trade. Asean aims to form an economic community modeled on the European Union, though without a common currency, by 2015. It has already signed free- trade accords with China, Japan, South Korea, Australia and New Zealand. Economic Recovery “It’s important that Mr. Obama look more to the East,” Thai Deputy Commerce Minister Alongkorn Ponlaboot said in an interview. “There has been a power shift toward this region after the financial crisis, and I hope Obama will have a clear message for Asean when he visits.” Asia’s export-dependent economies are emerging from recession as global demand increases for the region’s computer chips, cars and commodities. In January, Detroit-based General Motors Co. received local funding to open a diesel-engine plant in Thailand, and Santa Clara, California-based Intel Corp. plans to start operations of a chip assembly and testing plant in Vietnam later this year. Asean leaders will aim to make the U.S. “understand why we have been able to succeed and why we will continue to undertake the policies that would ensure that this economic recovery is not just a coincidence,” Pangestu said. “We’ve actually moved further than you think and the opportunity is there.” Investment Programs Foreign direct investment from the U.S. into Asean from 2006 to 2008 amounted to $12.8 billion, or 6.9 percent of the bloc’s total, down from 17 percent from 1995 to 2001. The EU invested $42.1 billion into Asean from 2006 to 2008 while Japan put down $28.7 billion, statistics show . Economic disparity among Asean members has hindered the region’s ability to leverage its market of 584 million people. The region’s four largest economies — Singapore, Thailand, Malaysia and Indonesia — account for almost 80 percent of all foreign investment into Asean. The Philippines, Brunei, Cambodia, Laos, Myanmar and Vietnam are the other members of the 10-nation group. “There is a lot of unutilized potential” for joint investments between Southeast Asian countries, Mustapa Mohamed , Malaysia’s minister of international trade and industry, said in an interview. “We are underperforming in intra-Asean trade, so that’s a priority this year.” Trade Initiative Southeast Asian countries are split on Obama’s top trade initiative, the Trans-Pacific Partnership, which he aims to turn into a platform for economic integration in the Asia-Pacific region. Vietnam, Singapore and Brunei will join New Zealand, Chile, Peru, Australia and the U.S. for talks on the TPP later this year. “The success of the TPP depends very much on the attitude and the viewpoint of the U.S.,” Vu Huy Hoang , Vietnam’s minister of industry and trade, told reporters. Malaysia and Indonesia are both reviewing the TPP and haven’t decided whether to join talks. Thailand prefers a free- trade deal between the U.S. and Asean as a bloc, Alongkorn said. “We have noted that investments from the U.S. have dropped,” Surin Pitsuwan , Asean’s secretary-general, told reporters yesterday after the meeting, which ran from Feb. 27 until today. “There is very keen interest in strengthening cooperation, but because of the differences and diversity among us we have not yet made a definite decision whether or not this is going to be a free-trade agreement.” China Trade Indonesia notified its partners in Asean earlier this year that it wants to revise the group’s free-trade agreement with China, which took force on Jan. 1 and scraps tariffs on about 90 percent of goods. Textiles, food and electronics companies have said they will suffer from the inflow of cheaper Chinese goods. China’s trade with Asean has jumped sixfold since 2000 to $193 billion in 2008. The country’s share of Southeast Asia’s total commerce increased to 11.3 percent from 4 percent in that time, whereas the U.S. portion fell to 10.6 percent from 15 percent, Asean statistics show. “We don’t worry so much about having to compete with the U.S. in the way some sectors worry about having to compete with China,” Indonesia’s Pangestu said. “From the Asean-U.S. perspective of increasing trade and investment, it’s more like, ‘Hey guys, the U.S. is back.’” To contact the reporter on this story: Daniel Ten Kate in Putrajaya, Malaysia, at dtenkate@bloomberg.net

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APEC Leaders Agree to Maintain Economic Stimulus Until `Durable’ Recovery

November 15, 2009

By Shamim Adam Nov. 15 (Bloomberg) — Asia-Pacific leaders said the economic recovery isn’t on a “solid footing” yet, pledging to maintain stimulus measures until there is “durable” growth. Economies must shift toward a more balanced expansion strategy in the aftermath of the global crisis and cannot return to “growth as usual,” the leaders from the 21-member Asia-Pacific Economic Cooperation group said today in a statement. APEC will also take steps and determine ways to realize its vision of a regional free trade area, they said. “Our robust policy responses have helped to set the stage for recovery,” the leaders said. “But economic recovery is not yet on a solid footing. We will maintain stimulus policies until a durable economic recovery has clearly taken hold.” Policy makers are moving to unwind some of the emergency steps they took to counter the world recession after cutting interest rates and outlaying more than $2 trillion in government expenditure. APEC leaders this week said fiscal and monetary stimulus measures need separate exit strategies and timing, as countries seek a balance between protecting nascent growth and preventing asset bubbles. The statement did not mention currencies. APEC finance ministers earlier this week called for market-oriented exchange rates. The call comes as pressure rises on China, the world’s third-largest economy, to abandon its currency’s fix to the dollar maintained since July 2008. ‘Not Yet Solid’ “The profound impact of the international financial crisis still persists,” China’s President Hu Jintao told APEC leaders in Singapore today. “The foundation is not yet solid for the world economic upturn.” APEC was set up in 1989 to advance trade in the region. The group faces “political” hurdles in its long-term vision to form a region-wide free trade area, Singapore Prime Minister Lee Hsien Loong said yesterday. The U.S. said yesterday it will enter into discussions with the four countries that are part of the Trans-Pacific Strategic Economic Partnership Agreement, an accord aimed at removing trade barriers among its members. APEC is already falling behind on some goals even as it strives for other agreements. Members in 1994 signed the so- called Bogor Declaration, pledging to create free and open trade in the group’s developed economies by 2010 and in its emerging economies by 2020. Bogor Goals “We reaffirm our commitment to the Bogor Goals of free and open trade and investment,” the leaders said. “We direct ministers and officials to report to us next year with a meaningful assessment of the industrialised APEC economies’ achievement of the Bogor Goals.” APEC’s developed members should adhere to the group’s goal for free trade by next year, Chinese Commerce Minister Chen Deming said Nov. 13. Singapore’s Lee has said that next year’s target is not likely to be met. Leaders also pledged to “exercise all possible flexibility” to accelerate negotiations and complete the eight-year-old World Trade Organization’s Doha Round of talks in 2010. “We strongly reaffirm that the most effective means of dealing with protectionist pressures and delivering a global stimulus package to sustain and secure our recovery is an ambitious and balanced conclusion to Doha in 2010,” they said. Climate Change APEC leaders reaffirmed their commitment to reaching an “ambitious outcome” on climate change in Copenhagen next month. An earlier draft of the statement said global emissions will need to peak over the next few years and be reduced to 50 percent below 1990 levels by 2050, with a later timeframe for peaking in developing countries. The final statement excluded that reference. APEC’s biggest economies are the U.S., Japan and China. Other members are Australia, Brunei, Canada, Chile, Hong Kong, Indonesia, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, and Vietnam. To contact the reporters on this story: Shamim Adam in Singapore at sadam2@bloomberg.net

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Obama Needs to Match Bush’s Commitment to Free Trade at APEC, Najib Says

November 12, 2009

By Daniel Ten Kate and Shamim Adam Nov. 13 (Bloomberg) — Malaysian Prime Minister Najib Razak urged President Barack Obama to show the same commitment to free trade that his predecessor, George W. Bush , expressed at a meeting of Asia-Pacific leaders last year. “APEC in Singapore is a wonderful opportunity for us to make a very strong political statement that we will resist protectionism,” Najib said in the city state ahead of the group’s summit, which Obama will attend. “The thing I liked about President Bush’s foreign policy is that he was very pro- free trade. I hope the same message will be repeated.” Trade will be a focus of Obama’s first trip to Asia as president, which starts today in Japan and also includes stops in China and South Korea. Singapore Prime Minister Lee Hsien Loong said U.S. participation in the four-member Trans-Pacific Partnership would be a “significant advance” toward a wider Asia-Pacific trade area. The U.S. has ceded economic influence in much of Asia to China in a region that contains sea lanes vital to world commerce, as well as coal, oil and other commodities. China’s trade with the Association of Southeast Asian Nations jumped almost 20-fold since 1993 to $179 billion, with its share of total Asean commerce rising to 10.5 percent from 2 percent. The comparable U.S. portion during that period fell to 12 percent from 17 percent, according to Asean statistics. “Obama is not a president who believes instinctively in free trade,” said Razeen Sally, a director of the European Centre for International Political Economy in Brussels, a trade-policy research group. “He’s not a rampant protectionist either; he’s ambivalent, somewhere in between.” Trans-Pacific Partnership The U.S., Australia, Peru and Vietnam are among the Asia- Pacific Economic Cooperation’s 21 member economies that are interested in joining the Trans-Pacific Partnership, Lee said. Signatories to the 2005 agreement include Singapore, New Zealand, Brunei and Chile. U.S. participation would transform an agreement between countries with a combined gross domestic product that is almost 30 times smaller than the U.S., amid competing visions for Asian economic cooperation and the role America should play. The region’s leaders are impatient for a clear U.S. approach to trade, said C. Fred Bergsten , director of the Peterson Institute for International Economics in Washington. ‘As Soon as Possible’ “Over time this little seed can bloom and grow,” Lee told APEC business leaders gathered in Singapore. “We hope this will materialize as soon as possible, and when it materializes it will be a significant advance towards the ideal of a free- trade area which encompasses the whole Asia Pacific.” Australia and Peru agreed to start negotiations to join the Trans-Pacific Partnership, known as the TPP, last year as the World Trade Organization’s Doha round of global talks foundered. The agreement offers a “high-standard template and we can work to bring in other economies in stages,” Lee said. The U.S. in March postponed initial negotiations to join the TPP. Obama, Japan’s Prime Minister Yukio Hatoyama and China’s President Hu Jintao are among leaders convening in Singapore to discuss boosting trade and linkages in a region that accounts for more than half of global GDP. New Zealand plans to continue persuading the U.S. to join a regional free-trade agreement, either unilateral or multilaterally, Finance Minister Bill English said in an interview yesterday. “Certainly from our point of view it would work and the region would benefit from it.” To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net ; Shamim Adam in Singapore at sadam2@bloomberg.net

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Geithner Presses for Market-Set Exchange Rates as APEC Finance Chiefs Meet

November 11, 2009

By Shamim Adam and Chris Anstey Nov. 12 (Bloomberg) — U.S. Treasury Secretary Timothy Geithner said Asia-Pacific nations need “market-oriented” currencies that are in line with their economic fundamentals to encourage new sources of growth. Members of the Asia-Pacific Economic Cooperation group, which make up more than half of the world’s gross domestic product, must focus on strategies to boost private demand as policy makers start unwinding stimulus measures, Geithner and the finance ministers of Indonesia and Singapore wrote in a Wall Street Journal column distributed by the U.S. Treasury today. The call comes as pressure rises on China, the world’s third-largest economy, to abandon the currency’s fix to the dollar it has implemented since July 2008. A stronger yuan may help to deepen a shift in the nation’s economy toward domestic demand, away from reliance on exports, analysts say. “Market-oriented exchange rates in line with economic fundamentals will be essential in assuring the resource and sectoral shifts to match and foster the new patterns of demand,” said Geithner, Indonesia’s Sri Mulyani Indrawati and Singapore’s Tharman Shanmugaratnam . APEC finance ministers are meeting in Singapore today, before leaders from the 21-member group gather Nov. 14-15. Policy makers in a number of forums, including the Group of 20, have called this year for a shift away from global dependence on American spending and Chinese savings to address trade and investment imbalances that contributed to the financial crisis. ‘New Period’ “APEC must lay the basis for a new period of economic dynamism over the medium to long term,” the three finance chiefs said. “Depending on individual economies’ circumstances, a combination of macroeconomic policy adjustments and structural reforms will be needed.” China has maintained the yuan’s value at around 6.83 against the dollar since July 2008. European Central Bank President Jean-Claude Trichet said last week a stronger Chinese currency would help the global economy, and the International Monetary Fund has called it “significantly undervalued.” The region’s emerging economies need “deeper and more efficient” financial markets to boost investment, Geithner and his colleagues also said. Those nations must strengthen social policies such as health and retirement programs, reducing the need for precautionary savings that contribute to global imbalances, the officials wrote. APEC’s biggest economies are the U.S., Japan and China. Other members are Australia, Brunei, Canada, Chile, Hong Kong, Indonesia, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, and Vietnam. To contact the reporters on this story: Shamim Adam in Singapore at sadam2@bloomberg.net ; Chris Anstey in Singapore at canstey@bloomberg.net

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China Will Boost Cooperation With Asean on Trade, Investments, Chen Says

August 14, 2009

By Shiyin Chen and Suttinee Yuvejwattana Aug. 15 (Bloomberg) — China wants to boost cooperation with members of the Association of Southeast Asian Nations to develop trade and increase investment, said Chinese Commerce Minister Chen Deming . China and the regional grouping are deepening ties as the global economic recession weighs on trade, Chen said, speaking at an Asean economic ministers meeting in Bangkok. They signed an agreement today in Bangkok that may boost two-way investment as much as 60 percent during the next two years, Thailand’s Commerce Minister Porntiva Nakasai told reporters. Chen spoke before the signing. China said in April it plans to create a $10 billion investment fund and offer $15 billion in credit to southeast Asian countries, extending its influence as the region attempts to weather the global financial crisis. Trade between China and the regional grouping fell 24 percent to $88 billion in the first half of the year, Chen said. China is the eighth-largest investor in Asean, with accumulated investments of $6.1 billion as of 2008, the regional grouping said in a statement today. Asean has invested a total of about $5.6 billion in China as of last year, the statement added. China companies may seek investments in the steel and agriculture industries within Southeast Asia, while Asean nations may invest in Chinese financial and retail companies, Chaiya Yimvilai, a spokesman for the Asean meeting, said today. Asean has said it wants the region to become a European Union-style economic community, without a common currency, by 2015. Indonesia, Thailand, Malaysia, Singapore, Brunei, the Philippines, Cambodia, Laos, Myanmar and Vietnam make up the regional organization. Asean yesterday signed a free trade agreement with India, pledging to reduce tariffs for about 80 percent of goods between 2013 and 2016. A similar agreement with China is scheduled to take effect next year. To contact the reporter on this story: Shiyin Chen in Bangkok at schen37@bloomberg.net ; Suttinee Yuvejwattana in Bangkok at Suttinee1@bloomberg.net .

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