The headquarters of the People's Bank of China in Beijing. The bank has enough scope for monetary easing should conditions deteriorate. Xinhua via AP Photo
The headquarters of the People's Bank of China in Beijing. The bank has enough scope for monetary easing should conditions deteriorate. Xinhua via AP Photo

No need to be fearful for India and China



Both economies depend heavily on the global climate but worries about them having a hard landing are overblown. Indeed Asia's defining moment may be near. Stephen Roach writes

AFears are growing that China and India will be the next victims of the global economic carnage.

This would have enormous consequences. Asia's developing and newly industrialised economies grew at an 8.5 per cent average annual rate over 2010 and 2011 - nearly triple the 3 per cent growth elsewhere in the world. If China and India are next to fall, Asia would be at risk, and it would be hard to avoid a global recession.

These concerns are understandable: both economies depend heavily on the broader global climate.

China is sensitive to downside risks to external demand - more relevant than ever since crisis-torn Europe and the US collectively accounted for 38 per cent of total exports in 2010. But India, with its large current-account deficit and external funding needs, is more exposed to tough conditions in global financial markets.

Yet fears of hard landings for both economies are overblown, especially regarding China. Yes, China is paying a price for aggressive economic stimulus undertaken in the depths of the subprime crisis. The banking system funded the bulk of the additional spending, and thus is exposed to any deterioration in credit quality that may have arisen from such efforts. There are also concerns about the property market and mounting inflation.

While none of these problems should be minimised, they are unlikely to trigger a hard landing. Long fixated on stability, Chinese policymakers have been quick to take preemptive action.

That is particularly evident in China's successful campaign against inflation. Administrative measures in the agricultural sector, aimed at alleviating supply bottlenecks for pork, cooking oil, fresh vegetables, and fertiliser, have pushed food-price inflation lower.

Meanwhile, the People's Bank of China, which raised benchmark one-year lending rates five times in the year ending last October, to 6.5 per cent, now has plenty of scope for monetary easing should economic conditions deteriorate.

The same is true with mandatory reserves in the banking sector, where the government has already pruned 50 basis points off the record 21.5 per cent required-reserve ratio. Relatively small fiscal deficits - only about 2 per cent of GDP in 2010 - leave China with an added dimension of policy flexibility should circumstances dictate.

Nor has China been passive with respect to mounting speculative excesses in residential property. In 2010, it implemented tough regulations, raising downpayments from 20 to 30 per cent for a first home, to 50 per cent for a second residence, and to 100 per cent for purchases of three or more units. This strategy seems to be working.

Moreover, it is a serious exaggeration to claim, as many do, that the Chinese economy is one huge property bubble. Yes, total fixed investment is approaching an unprecedented 50 per cent of GDP, but residential and non-residential property, combined, accounts for only 15 to 20 per cent of that - no more than a tenth of the overall economy.

As for Chinese banks, the main problem appears to be exposure to ballooning local-government debt which, according to the government, totalled US$1.7 trillion (Dh6.2tn) - or nearly a third of GDP - at the end of 2010. About half of this debt was on their books prior to the crisis.

Some of the new debt that resulted from the stimulus could well end up being impaired, but continuing urbanisation - about 15 to 20 million people per year move to cities - provides enormous support on the demand side for investment in infrastructure development and residential and commercial construction. That tempers the risks to credit quality and, along with relatively low loan-to-deposit ratios of about 65 per cent, should cushion the Chinese banking system.

India is more problematic. As the only economy in Asia with a current-account deficit, its external funding problems can hardly be taken lightly.

Like China, India's economic-growth momentum is ebbing. But unlike China, the downshift is more pronounced - GDP growth fell through the 7 per cent threshold in the third quarter of last year, and annual industrial output actually fell by 5.1 per cent in October.

But the real problem in, in contrast to China, Indian authorities have far less policy leeway. For starters, the rupee is in near free-fall. That means the Reserve Bank of India - which has lifted its benchmark policy rate 13 times since the start of 2010 to deal with a still-serious inflation problem - can ill afford to ease monetary policy. Moreover, an outsize consolidated government budget deficit of about 9 per cent of GDP limits India's fiscal-policy discretion.

While China is in better shape than India, neither economy is likely to implode on its own. It would take another shock to trigger a hard landing in Asia.

One obvious possibility would be a disruptive break-up of the euro zone. In that case, both China and India could find themselves in serious difficulty - with an outright contraction of Chinese exports and heightened external funding pressures for India.

While I remain a euro-sceptic, I believe that the political will to advance European integration will prevail. Consequently, I attach a low probability to the euro zone's disintegration. Barring such a worst-case outcome for Europe, the odds of a hard landing in either India or China should remain low.

Seduced by the political economy of false prosperity, the West has squandered its might. Driven by strategy and stability, Asia has built on its newfound strength. Asia's defining moment could be at hand.

Stephen Roach, a member of Yale University faculty, is the non-executive chairman of Morgan Stanley Asia and the author of The Next Asia

* Project Syndicate

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COMPANY PROFILE

Founders: Sebastian Stefan, Sebastian Morar and Claudia Pacurar

Based: Dubai, UAE

Founded: 2014

Number of employees: 36

Sector: Logistics

Raised: $2.5 million

Investors: DP World, Prime Venture Partners and family offices in Saudi Arabia and the UAE

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By committing to at least one of these daily, you can bring more gratitude into your life, says Ong.

  • During your morning skincare routine, name five things you are thankful for about yourself.
  • As you finish your skincare routine, look yourself in the eye and speak an affirmation, such as: “I am grateful for every part of me, including my ability to take care of my skin.”
  • In the evening, take some deep breaths, notice how your skin feels, and listen for what your skin is grateful for.
Guardians of the Galaxy Vol 3

Director: James Gunn

Stars: Chris Pratt, Zoe Saldana, Dave Bautista, Vin Diesel, Bradley Cooper

Rating: 4/5

Kill

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Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

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Tell Me Who I Am

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Stars: Alex and Marcus Lewis

Four stars

FINAL SCORES

Fujairah 130 for 8 in 20 overs

(Sandy Sandeep 29, Hamdan Tahir 26 no, Umair Ali 2-15)

Sharjah 131 for 8 in 19.3 overs

(Kashif Daud 51, Umair Ali 20, Rohan Mustafa 2-17, Sabir Rao 2-26)

EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE

Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates

Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi

Yadoo’s House Restaurant+& Cafe

For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.

Golden Dallah

For the cappuccino, luqaimat and aseeda.

Al Mrzab Restaurant

For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.

Al Derwaza

For the fish hubul, regag bread, biryani and special seafood soup. 

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51% of parents in the UAE feel like they are failing within the first year of parenthood

57% vs 43% is the number of mothers versus the number of fathers who feel they’re failing

28% of parents believe social media adds to the pressure they feel to be perfect

55% of parents cannot relate to parenting images on social media

67% of parents wish there were more honest representations of parenting on social media

53% of parents admit they put on a brave face rather than being honest due to fear of judgment

Source: YouGov

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Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

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The annual report by the Community Security Trust, which advises the Jewish community on security , warned on Thursday that anti-Semitic incidents in Britain had reached a record high.

It found there had been 2,255 anti-Semitic incidents reported in 2021, a rise of 34 per cent from the previous year.

The report detailed the convictions of a number of people for anti-Semitic crimes, including one man who was jailed for setting up a neo-Nazi group which had encouraged “the eradication of Jewish people” and another who had posted anti-Semitic homemade videos on social media.

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1. Black holes are objects whose gravity is so strong not even light can escape their pull

2. They can be created when massive stars collapse under their own weight

3. Large black holes can also be formed when smaller ones collide and merge

4. The biggest black holes lurk at the centre of many galaxies, including our own

5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

COMPANY PROFILE

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Sector: FinTech / PropTech
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Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Sarfira

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Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
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Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
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Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
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FIXTURES

UAE’s remaining fixtures in World Cup qualification R2
Oct 8: Malaysia (h)
Oct 13: Indonesia (a)
Nov 12: Thailand (h)
Nov 17: Vietnam (h)
 

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High fever (40°C/104°F)
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Vomiting
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While you're here
On Instagram: @WithHopeUAE

Although social media can be harmful to our mental health, paradoxically, one of the antidotes comes with the many social-media accounts devoted to normalising mental-health struggles. With Hope UAE is one of them.
The group, which has about 3,600 followers, was started three years ago by five Emirati women to address the stigma surrounding the subject. Via Instagram, the group recently began featuring personal accounts by Emiratis. The posts are written under the hashtag #mymindmatters, along with a black-and-white photo of the subject holding the group’s signature red balloon.
“Depression is ugly,” says one of the users, Amani. “It paints everything around me and everything in me.”
Saaed, meanwhile, faces the daunting task of caring for four family members with psychological disorders. “I’ve had no support and no resources here to help me,” he says. “It has been, and still is, a one-man battle against the demons of fractured minds.”
In addition to With Hope UAE’s frank social-media presence, the group holds talks and workshops in Dubai. “Change takes time,” Reem Al Ali, vice chairman and a founding member of With Hope UAE, told The National earlier this year. “It won’t happen overnight, and it will take persistent and passionate people to bring about this change.”

Law 41.9.4 of men’s T20I playing conditions

The fielding side shall be ready to start each over within 60 seconds of the previous over being completed.
An electronic clock will be displayed at the ground that counts down seconds from 60 to zero.
The clock is not required or, if already started, can be cancelled if:
• A new batter comes to the wicket between overs.
• An official drinks interval has been called.
• The umpires have approved the on field treatment of an injury to a batter or fielder.
• The time lost is for any circumstances beyond the control of the fielding side.
• The third umpire starts the clock either when the ball has become dead at the end of the previous over, or a review has been completed.
• The team gets two warnings if they are not ready to start overs after the clock reaches zero.
• On the third and any subsequent occasion in an innings, the bowler’s end umpire awards five runs.

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
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Industry: Refurbished electronics
Funds raised so far: $10m
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The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

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Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana

Rating: ★★★★

UAE currency: the story behind the money in your pockets
Sly Cooper and the Thievius Raccoonus

Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5

Indika

Developer: 11 Bit Studios
Publisher: Odd Meter
Console: PlayStation 5, PC and Xbox series X/S
Rating: 4/5

Specs

Power train: 4.0-litre twin-turbo V8 and synchronous electric motor
Max power: 800hp
Max torque: 950Nm
Transmission: Eight-speed auto
Battery: 25.7kWh lithium-ion
0-100km/h: 3.4sec
0-200km/h: 11.4sec
Top speed: 312km/h
Max electric-only range: 60km (claimed)
On sale: Q3
Price: From Dh1.2m (estimate)

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

UAE athletes heading to Paris 2024

Equestrian
Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).
Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).

Cycling
Safia Al Sayegh (women's road race).

Swimming
Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics
Maryam Mohammed Al Farsi (women's 100 metres).

How Tesla’s price correction has hit fund managers

Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.

It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.

The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.

Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.

Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.

He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.

AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”

A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.

Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.

Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.

Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.

By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.

Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.

In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”

Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.

She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.

Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.

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Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
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Banthology: Stories from Unwanted Nations
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TECH SPECS: APPLE WATCH SERIES 8

Display: 41mm, 352 x 430; 45mm, 396 x 484; Retina LTPO OLED, up to 1000 nits, always-on; Ion-X glass

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Health metrics: 3rd-gen heart rate sensor, temperature sensing, ECG, blood oxygen, workouts, fall/crash detection; emergency SOS, international emergency calling

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Durability: IP6X, water resistant up to 50m, dust resistant

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Finishes: Aluminium – midnight, Product Red, silver, starlight; stainless steel – gold, graphite, silver

In the box: Watch Series 8, magnetic-to-USB-C charging cable, band/loop

Price: Starts at Dh1,599 (41mm) / Dh1,999 (45mm)

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Company name: 3S Money
Started: 2018
Based: London
Founders: Ivan Zhiznevsky, Eugene Dugaev and Andrei Dikouchine
Sector: FinTech
Investment stage: $5.6 million raised in total

Meatless Days
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COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded