The Impact of the quantitative easing financial policy change initiated by the United States (U.S.) Central Bank in 2008 in order to stimulate the failing U.S. economy due to their standard financial policies no longer being effective was finally lifted last week. The news of this policy change quickly prompted Chinese state media to issue a response saying the latest policy change will not affect the healthy state of the economy in China according to BBC News World Asia (2014). Additionally Chinese newspapers pointed the blame at the poor policies of the West for the financial crisis and the residual negative effects that rippled through the rest of the global economy said BBC News World Asia (2014). History will likely be forgotten as the global economy recovers from the financial crisis created by the U.S. in 2008 and will be surpassed and recreated by the Chinese market over the coming decade.
Some of the pain inflicted on emerging economies like
China and Singapore and others in South East Asia are evident in the devaluation
of currency and inflation in markets like food and transportation according to the
report by AsiaOne Business News (2014) and the press release issued by the Singapore
Ministry of Trade and Industry last week. The report actually shows some signs
of inflation dropping in the Singapore market which indicates a compliment to
the reports by the Chinese newspaper reports explaining that China and other
Asian economies are stable and will not be effected by the U.S. removal of the quantitative
easing policies on their own financial system. Essentially this is good news
for economies in the region as it points to positive outlooks for banks being
able to provide loans and investors to be supported by successful planning and
business development in these and other Association of Southwest Asian Nations countries.
What these articles does not talk about is the pace of
growth rather they simply talk about the fact that currency is not affected as
critically as could be anticipated. The article by AsiaOne Business News (2014)
talks about a sustained inflation rate being expected for the duration of the
year and into the final quarter of 2015 however the outlook does not look at
other political and social issues from around the world as being part of the
equation that could easily change things over the coming short term environment.
Issues like the spread of infectious disease, terrorism and political elections
are not discussed. These events are on-going and can have major impact on the
markets and perceived expectations in the market.
Finally, the AsiaOne Business News articles does talk
about the fact that as the South East Asia market grows, issues concerning wages
of workers will increase (AsiaOne Business News 2014). This would indicate that
the quality of life is increasing in these emerging markets and will continue
to become a point of concern as visibility of the social environment is
exposed. Many questions will begin to be asked about how these countries will
address the cost of living and the role these countries will play in major social
policy in the rest of the world.
References
AsiaOne Business News (2014). Singapore inflation eases further to 0.6% in September. Retrieved from http://business.asiaone.com/news/singapore-inflation-eases-further-06-september
BBC News World Asia (2014). China media: US quantitative easing impact played
down. Retrieved from http://www.bbc.com/news/world-asia-china-29844518
Wikipedia (2014). Quantitative easing. Retrieved from https://en.wikipedia.org/wiki/Quantitative_easing
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