Belt Road Nations High on Bloomberg Emerging Markets 2018 Performance
Multiple Belt and Road (BRI) nations have featured in the top 20 emerging market economies, according to Bloomberg’s 2018 rankings. Russia finished in second place, just behind Malaysia, and ahead of China in third. Other Asian countries, such as Philippines, Thailand, Indonesia, and India also all featured in high positions (click on links for complimentary investment guides) while key European Belt and Road nations, such as Poland, Hungary, Romania, and Croatia also featured. Turkey, another BRI nation, fell in rankings this year due to high inflation costs, essentially wiping out real GDP growth during 2018.
The rankings were based upon a number of measured criteria, including metrics ranging from growth prospects to the state of the current account, sovereign credit ratings, and stock and bond valuations. GDP growth and current account balances are from economist forecasts for 2018 and 2019 compiled by Bloomberg. Sovereign ratings are from S&P Global Ratings. Real effective exchange rates are based on data from JPMorgan Chase.
Russia gained 2.36 points on these criteria, topped only by Malaysia with 2.55. The Asian country has held on to the top spot in the list since the last ratings were published in June, thanks to its current account surplus and relatively stable economic growth outlook and valuations. The Russian economy’s stronger position was earlier noted in the annual World Banks’ Doing Business survey, which ranks 190 national economies based on 11 areas of business regulation. This year, Russia rose to 31st place, four spots above last year’s results.
China’s fall to third place is a result of investors deciphering how the country is impacted by the US-China trade frictions.
The rankings are as follows:
1 – Malaysia
2 – Russia
3 – China
4 – Philippines
5 – Colombia
6 – Thailand
7 – Poland
8 – Mexico
9 – Chile
10 – South Korea
11 – Indonesia
12 – India
13 – Peru
14 – Hungary
15 – Brazil
16 – Romania
17 – Egypt
18 – Croatia
19 – South Africa
Chris Devonshire-Ellis of Dezan Shira & Associates comments: “Some of the results seen have been impacted by US tariff threats and sanctions, and this is especially the case with China and Turkey. Russia, though, is showing stronger signs of recovery and adapting to sanctions, showing such measures only have a limited shelf-life before economies adapt and can absorb the impact. The ASEAN nations are all showing strong growth, my only surprise being the omission of Vietnam. The trade and infrastructure investment into BRI nations continues to reverberate throughout these economies and these will all be players to watch in 2019.”
Silk Road Briefing is produced by Dezan Shira & Associates. Chris Devonshire-Ellis is the practice Chairman. The firm has 26 years of China operations with offices throughout China, Asia and Europe. Please refer to our Belt & Road desk or visit our website at www.dezshira.com for further information.
In this issue of Russia Briefing, we explain the basics of business set up for foreign investors, from trademark registration, representation, trading mechanisms, and manufacturing. With low corporate tax rates, Russia is set to become the most dynamic of the trade corridors opening up to Asia.
Faced with heightened geopolitical risks, and rising labor and land and labor costs, many foreign investors are looking to restructure their China-based businesses. Restructuring and relocation plans, however, are being expressed in different ways, depending on the nature and needs of the business. In this issue of China Briefing magazine, we walk foreign investors through the process of relocating their China businesses.
This unique and currently only available study into the proposed Silk Road Economic Belt examines the institutional, financial and infrastructure projects that are currently underway and in the planning stage across the entire region. Covering over 60 countries, this book explores the regional reforms, potential problems, opportunities and longer term impact that the Silk Road will have upon Asia, Africa, the Middle East, Europe and the United States.