July 9, 2010 (Chinavestsor) China may have competition for the title of Asia's fastest growing economy this year and that competition comes in the form of city state Singapore, which may post GDP growth of 10.8% this year, according to the median estimate of 13 economists surveyed by Bloomberg. Singapore reports second-quarter GDP results on July 14.
Singapore has been largely dependent on electronics exports to drive its economic growth, but has taken steps to diversify its economy in recent years. The push to bolster services may sustain the economy and support investment that spurred the island’s benchmark stock index to outperform counterparts in China, Taiwan, Japan and Australia this year, according to Bloomberg.
Singapore's benchmark exchange is up 28% this year, outperforming the Shagnhai Composite, the Hang Seng and Taiwan's Taiex. Singapore's government has raised GDP estimates twice in 2010. The IMF said the last time Singapore's growth outpaced China was in 2000.
Singapore’s manufacturing increased an average 45% in the first five months of 2010, after declining an average 13% in the same period last year while pharmaceutical output doubled every month from March to May, Bloomberg reported.
July 9, 2010 (Chinavestor) Taiwan said the Economic Cooperation Framework Agreement (ECFA), the landmark trade agreement between the island nation and mainland China, could boost its GDP by 0.4% and help add 60,000 new jobs in the next two years. A boost to GDP of 0.4% is equivalent to $1.71 billion.
Analysts speculated that China purchased Japanese debt after paring its holdings of Euro-denomiated holdings. The Japanese Yen has held up relatively well while riskier currencies have faltered in recent months, making Japanese bonds all the more attractive to China.
China may be considering small alterations to its foreign exchange reserves, the largest in the world and largely denominated in U.S. Dollars. The yield on Japan’s benchmark 10-year bond dropped last quarter by the most since the last three months of 2008, declining to 1.055 percent on July 1, the lowest since August 2003, Bloomberg News reported.
China is Japan's largest export and customer and Japan has been working to bolster ties with China as China's economic growth continues to soar. China boosted its holdings of U.S. Treasuries to $900.2 billion in April, Bloomberg reported. China holds $2.45 trillion in foreign currency reserves.