Talking point
The long view in Emerging Markets – middle-income trap, demographics and economic growth
A number of factors, including the decline in commodity prices, sizeable corporate foreign-currency debt, a strengthening dollar and the prospect of higher US interest rates, are weighing on the economic and financial outlook in the emerging markets (EM). The relative lack of reform combined with a weakening of some of the structural factors that underpin growth has raised concern about the medium-term outlook in many, but not all EM. [more]
Germany
Focus Germany: Solid growth but difficulties for exports and construction
According to our and consensus expectations Germany will record 4 years (2014-2017) of above potential GDP growth in an extremely narrow range of 1.5% to 1.7%, despite substantial shocks and massive swings in growth drivers. If growth breaks out, a downside move seems more likely than higher growth. The economic slowdown in the oil-producing countries due to the falling oil price also carries implications for the German economy in terms of its foreign trade. Although the overall effect is positive for the German economy, German exports to oil-producing countries remain under pressure. Capital spending on residential construction has been growing sluggishly in recent years. The main reasons are: a shortage of building land, increased regulatory hurdles in virtually all construction sectors, high construction costs and a lack of skilled workers in the construction industry.  [more]
European integration
Ending China’s differential treatment: What’s at stake for EU trade defence?
When China joined the WTO in 2001, its accession protocol included an option for members to apply alternative methodologies when assessing dumping for Chinese imports. As parts of the provisions are set to expire in December 2016, the future approach to determine dumping in investigations concerning China in the EU has come under debate. There are several options on the table: They range from sticking to the status quo to allowing for full market economy treatment. The outcome matters for both European and Chinese industries and could have potential ramifications on China-EU trade relations. The European Commission therefore has to walk a tightrope taking into account the concerns of the different market participants affected as well as member states, which have often held divergent positions on anti-dumping in the past. [more]
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