Refishowcase Business & Finance

China’s government economic adviser said, Beijing might raise interest rates if the consumer price index (CPI) on a one-year 2.25 percent. Currently China’s policy makers were waiting for the CPI report.

Senior researcher Development Research Center, the think-tank institutions China Cabinet, Ba Shusong claimed, Beijing may precede the United States Federal Reserve (Fed) menaikkansukubungaacuanuntuk combat inflation in the country. High inflation makes people worry about withdrawing money from banks for investment in stocks and property so that the potential for manipulation of assets occurs.

“But, not yet decided whether to raise rates only a deposit or deposits and interest on loans,” said Ba told Reuters yesterday. Currently interest rates are one-year loan at 5.31 level persen.Bank Central China (PBOC) controls the amount of deposit interest and loans. Many say that the economy will not PBOC raised interest rates before the Fed do so because higher interest rates in China could lead to surge in the flow of funds.

However, Ba believes the entry of foreign funds was not as great as expected if the increased borrowing costs. The high interest rates will cool the heating in the property sector. Economists predict CPI rose 1.9 percent during 2009 and predicted inflation spike will occur in the coming months.

PBOC researchers believe Jinpu Jiao, inflationary pressures rather than as the main trigger higher interest rates in the quarter I/2010. Problem yuan, Ba rate is still much debate among researchers whether China should let its exchange rate to appreciate (rise) or tidak.Pemerintah China is still careful to change the yuan peg policy. Beijing China export rate is still weak so that changes can membayakan policy.

Brazil Endangered Asset Bubbles

Speculative asset bubble concerns moving from China to Brazil recently strengthened. Speculation has made stock prices and exchange rates in Brazil experienced jumps. Organization of Economic Cooperation and Development (OECD) issued a warning to Brazil as a developing country markets potentially experiencing asset bubbles.

“There is danger of an asset bubble in Brazil or India. We must be careful of these dangers. This is a real threat,” said Chairman of the OECD Angel Gurria. Gurria statement comes as investors awareness of these dangers. During January investors pulled their investments from stock market Sao Paulo for $ 500 million.

Bovespa index had tumbled 4.7 percent during Januari.Ini is the biggest turning point since the Brazilian stock market has rebounded with the recovery of the weakening global economy. Real exchange rate weakened to the lowest position since 2 September 2009. During the nine days of real fell to 1.885 per dolar.Pelemahan was lowered profit last year as a real rose 33 percent on the dollar.

However, Brazilian government says not worried about this threat. “We’re not worried about this because we have foreign exchange reserves (dollars) in large numbers,” said Brazilian Finance Minister Guido Mantega. The Government of Brazil thought through a real devaluation, exports become more competitive. Mantega Brazil earlier economic forecast to grow 5.2 percent this year after zero growth last year.

Memasnya tension on the investment climate in Brazil is triggered by changes in China policy. China-Brazil is a major economic link for the State Panda is the largest trading partner with $ 42 billion in total transactions in 2009. As we all know, Beijing has started a tight monetary policies to cool China’s economy started overheating.

New policy is intended to ease the manipulation of property and stock markets. Some in China worry about the manipulation can destroy the global economic recovery. China new policy is a direct impact on Brazilian exports, particularly in metal products in China and profitable pertanian.Perubahan dollars for other world currencies weaken.

The White House predicts that the U.S. fiscal deficit will swell to $ 1, 6 trillion in 2010. Swelling of the deficit is the latest and greatest record since World War II happened.

Last year, the U.S. government recorded a deficit of $ 1, 4 trillion, equivalent to 9.9 percent of GDP.

President Barack Obama burden increases with the gloomy predictions. As a result, the government stressed the importance of Obama’s middle pressing expenses. He also was looking for stimulus measures to boost the current economic improvement.

According to sources on Capitol Hill, restrictions projected deficit will reach USD700 billion. 2013 financial calculations are ultimately going to crawl up to $ 1 trillion at the end of the decade.

Obama will submit a list of expenditures for financing in 2011 which will begin on October 1 until September 30, next year.

Obama tried to overcome the deficit reduction and also the number of unemployed increased by the tax credit proposal. This step is done to encourage employers to receive workers and tax breaks for middle class families.

Obama previously criticized by the Republican Party, because too much to spend. In the accountability report he said, would bring the country out of the “big financial hole.”

According to estimates from the Office of Management and Budget of the White House these holes even bigger.

Financial estimates in 2010 that ended on September 30 next, significantly higher than expected non-partisan Congressional Budget Office for USD1, 35 trillion.

Although there are differences, both predict that the deficit will still increase nearly 10 percent of gross domestic product, the amount that has not seen since World War II, when measured as a percentage of the economy.

Freezing of Three-Year Program Is Not Enough

In the budget, Obama proposed three-year freeze on domestic programs to save $ 20 billion in 2011 and USD250 billion for the next decade.

However, it is not sufficient to reduce the deficit to three percent of GDP is considered sufficient for the economists.

According to estimates, the deficit will come down after the improving economy, with a range averaged 4.5 percent of GDP for decades to come.

China, as the largest shareholder in the U.S. financial request the State Government to set Uncle Sam’s financial state.

Recession that began in December 2007, making American financial conditions torn. However, the American gradually claimed if the economy has entered a recovery phase.

Indonesian Textile Association (API) deplored the attitude that domestic banks have also removed accusations textile and garment sector has a high risk or risky for credit disbursement. These conditions make the textile sector difficult to get loans from national banks.

Vice Chairman of the API Ade Sudradjat said, since 1998 and in the monetary crisis hit Indonesia, textile and garment sector began labeled as high-risk sector until now. So that makes many textile businesses to find alternative financing from foreign banks including Singapore in the form of export credit and others.

“So it better to seek funding from banks in foreign countries. Duit know it’s not nationalism. Yes we are looking for a solution to the problem of relying on here,” he said when contacted detikFinance, Tuesday (2/2/2010)

Actually Ade said, all types of manufacturing industry regardless of its form must have a risk, but national banks should address these issues more wisely. No matter what he said, the textile sector can absorb many workers whose numbers can drive the national economy.

“Now show me the same, which sectors are not at risk, all significant risks are minimized,” he said.

Although he admitted for the type of textile and garment industry is based on the domestic market, with the ASEAN-China Free Trade Agreement (ACFTA) will be under pressure. As for sector-based export sector it is still very strong relative to the pressure of free trade.

“For example, Indonesian textile exports in 2009 amounted to U.S. $ 9.8 billion, was down from the year 2008 amounted to U.S. $ 10.1 billion. Tapikan still generate foreign exchange, is not,” he said.

Based on the survey quoted banking from the site of Bank Indonesia (BI), over-fourth quarter of 2009, the manufacturing industry, especially textile and garment sub-sectors are still avoided for the distribution of banking credit.

Bank considers still weak demand from foreign textile and plan the implementation of the ASEAN-China Free Trade Agreement in 2010 will aggravate competition in the textile industry.

Banking is still avoiding the credit for building or property sector, especially the financing for the construction of malls and apartments, due to economic conditions that have not been recovered. Investment credit so that the long-term nature of this sector is considered risky.

Some producers elektonika world started to show its commitment to make Indonesia its production base. Principals of the world electronics products such as Sanyo, Toshiba, Changhong showed a strong desire to make Indonesia a production base.

“They’ve started, the symptoms considered to be Indonesia’s competitive,” said Minister of Industry, MS Hidayat in the event at the factory visit Toshiba, Cikarang, Monday (1/2/2010.)

Hidayat said that in addition to consideration of competitive labor in the field, Indonesia has a fairly large market. In fact, he said, the purchasing power electronics sector in the domestic market currently experiencing an increase up to 7% per annum despite the shadow of the global crisis some time ago.

“Our workforce easily trained and skilled,” he said.

But Hidayat admitted currently faced by Indonesia is still perseolan infrastructure limitations, which makes the weakening competitiveness of Indonesia in the field of infrastructure with other countries. For example the need to be observed is a matter of high interest rates, the high component of imported raw materials, Pungli, power supplies and others.

“The weakness of our high-cost,” he said.

Currently he said, the number of industries that produce electronic products and components, there are about 235 companies. Growth is expected to reach 10% per annum in the period 2010-2014 with the labor absorption capacity of 150,000 people.

United States manufacturing sector (U.S.) in December jumped to the highest level in four years. The data show that manufacturing expanded for five consecutive months.

Institute for Supply Management’s factory index mentioning the U.S. in December rose to 55.9 points compared to November which recorded 53.6 points. These data add to the public belief that the U.S. economy in 2010 will improve. “This (development of performance) that we need in 2010. The data show the recovery will form a V pattern,” said President Alan B Lancz & Associates Alan Lancz in Toledo, Ohio, USA.

U.S. factory index data in December was the highest since April 2006, when the index was in position 56 points. Index above 50 indicates expansion. As is known, the U.S. economy collapsed in late 2007 and entered the worst recession since the Great Depression of the 1930s. Read the rest of this entry »