In the debate over global manufacturing competitiveness, the labour cost question looms largest. The rapid growth in Chinese wages is having an impact not only on firms currently manufacturing in China, but also on emerging economies seeking to grab a share of that manufacturing activity (like Vietnam and Bangladesh) and developed countries seeking to revive their own manufacturing sectors (like the US). Rising wages in China could threaten the country's status as a manufacturing powerhouse if they are not matched by comparable gains in productivity.
After a series of setbacks, the global economy is slowly mending US economy is strengthening; star performer Jobs market is on a modest upswing Housing is bouncing back China is recovering from a slowdown Boom years are over, but so is the slump European debt crisis is stabilizing but austerity is killing the economy Euro zone remains big drag on global growth Japan is showing signs of recovery under a new government Central banks are supporting the bounce - back in a big way Don't expect a brisk recovery, though; many risks remains Debt levels still high; asset prices are volatile; tensions in Middle East, China, Kore and has stabilised in Europe, but at a low level. In Germany, manufacturing output is rising again.
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Economics, International Trade and Finance, Markets, Monetary Policy, and Infrastructure
The global economy remains in precarious shape. Europe's debt crisis rages on, and although the euro appears to have survived its most recent test in the form of the Greek election on June 17th, austerity and financial-market uncertainty are depressing economic activity in Europe and, by extension, in much of the rest of the world. The Economist Intelligence Unit continues to expect global GDP growth to slow in 2012, and while our forecasts for the G3 economies—the US, euro zone and China—are essentially unchanged this month, we have cut our projections for Brazil and India.
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Debt, Economics, International Trade and Finance, Markets, and Financial Crisis
The bulk of the world's proven oil reserves are concentrated in places that are hostile to the West, unstable or a combination of the two. Since the US is the world's largest importer of oil, concerns about energy security have long simmered in Washington. On top of this, global oil prices have hit new highs in recent years and remained persistently strong. This adds to anxieties about the security of energy supplies and places a burden on the US economy. Partly as a result of elevated prices, however, something new—and, arguably, revolutionary—has happened.
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Climate Change, Economics, Energy Policy, International Trade and Finance, Oil, and Natural Resources
On November 8th this year China will begin the once-a-decade process of changing its leaders, with the launch of the 18th National Congress of the Chinese Communist Party (CCP). This will, by coincidence, come just two days after the US presidential elections. Both events will have momentous repercussions, both for the countries involved and for the world, but they will mark a study in contrasts. Unlike the US, China's succession battles are being waged in near secrecy, yet observers are already sure who the next president and premier will be. Less clear is what exactly China's new leadership will stand for. This report will examine their backgrounds and policy positions, asking what we can expect from the incoming administration.
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Communism, International Trade and Finance, Political Economy, and Governance
In 2012 Western sanctions on the Islamic Republic of Iran's oil and gas industry, aimed at putting economic pressure on it to change its nuclear policy, have reached an unprecedented level. Since the Iranian revolution in 1979, Iran has been in a state of hostility with the US, and has had cool relations, at best, with most European states. Sanctions against official Iranian financial institutions, individuals associated with the Islamic Republic and organisations suspected of being involved in nuclear proliferation activities have been mounting for some time. However, it is only recently that Iran's oil and gas sector has been specifically targeted by both the US and the EU in such a co-ordinated manner. Importantly, this marks the first time since the foundation of the Islamic Republic of Iran that the EU member states have collectively put in place sanctions on the export of Iranian crude oil—until now an action that, with a few exceptions, had only been taken by the US. The stakes have therefore been raised in Iran's confrontation with Western powers over the nuclear issue.
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Conflict Resolution, Foreign Policy, Islam, Oil, and Sanctions
Women are a key driver of economic growth. In the second half of the 20th century, the entry of women into the workforce helped to propel most of the world's developed economies. In the United States, an expanded pool of workers—from the emergence of the baby-boom generation and the rising number of women in the workplace—added nearly 2 percentage points a year to economic growth. Since 1995, the narrowing gap between male and female employment has accounted for a quarter of Europe's annual GDP growth. Today, women in the developing world are poised to have a similar impact—if they can be properly educated, equipped and empowered.
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Development, Economics, Gender Issues, International Trade and Finance, and Labor Issues
Three years after the global economy reached its lowest point in three-quarters of a century, the recovery remains incomplete and the outlook uncertain. On March 9th 2009, the capitalisation of Morgan Stanley\'s global stockmarket index fell to US$26trn, nearly 60% below its 2007 peak. Today, the value of the world\'s stockmarkets has yet to return to the pre-crisis level—nor has the confidence of most consumers and businesses. The excesses of the last ten years—the personal debt accumulated early in the last decade and the public debt added during the recession—have saddled many countries with weak economic foundations and little or no resilience to shocks. This has left the US economy, in particular, struggling for a third straight year to lock in faster growth. It has left debt-ravaged Europe in recession and China manoeuvring unsteadily to deflate a bubble. On the brighter side, the global economy will grow again this year and the imbalances that built up over the past decade will continue to unwind. But global growth will be slower this year than last, and a host of risks—from elevated oil prices to war in the Middle East, to the collapse of Europe\'s single currency—will weigh on confidence and reduce spending and investment.
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Economics, Globalization, Markets, Global Recession, and Financial Crisis
A serious deficit-reduction debate is underway. Despite wide policy differences, this is encouraging and long overdue. Agreement on some basic steps may happen soon. A serious, long-term deal won't happen until after the election. A credible plan will require revenue increases. These won't come quickly or easily, but they are unavoidable, The debt ceiling will be raised, amidst much drama. The US will not default on its debt. The US economy is still recovering...but higher energy and food prices are creating headwinds.
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Debt, Economics, Global Recession, and Financial Crisis
Leo Abruzzese, Editorial Director for North America, discusses the latest EIU forecast for the world. Forward-looking economic indicators have continued to improve in many countries in recent months, suggesting that the worst of the contraction in global GDP is over. The improvement has triggered hopes of an imminent and sustained global economic recovery. But does this signal the start of a genuine strong recovery, or is it a false dawn, to be followed by months—or even years—of anemic growth? What is the outlook for the US, Canada, and Asia, as well as the major emerging markets, over the next couple of years? And what are the downside risks to this outlook?
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Economics, International Trade and Finance, Markets, and Financial Crisis