ASEAN KEY DESTINATIONS
Keys to look for in 2011 Asia
By David Swartzentruber
Many observers feel that China’s inflation will exceed the 4 percent target and that policymakers will have to raise interest rates sharply.
The hot money capital inflows into Asean countries won’t vanish overnight but they may lose some of their hotness as the U.S. economy settles into a growth pattern expected to be around a 3.5 percent growth in gross domestic product.
Currency tension between China and the United States is expected to persist, most observers believe.
Asean financial markets may loose some of their fizz after the New Year as growth rates in most Asean countries are not expected to be maintained in 2011.
Turning to political issues, India’s corruption issue may paralyze parliament with the opposition blocking deliberations. Scandals may result in a less business-friendly environment. Recently unpredictable North Korea has turned down its rhetoric following the visit of U.S. envoy Bill Richardson. Will the Korean peninsula remain a potential battle zone or will there be progress toward a more lasting solution to the North-South issues.
How China employs it regional influence will be a key and how the territorial issues in the South China Sea play out will be major themes to unfold.
Lastly, leadership in Japan and Australia may not be strong enough to push through much needed reforms.
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