A tentative resolution of the Cyprus problem has been agreed,and the prospect of a bailout for the tiny yet significant nation has sent Asian shares higher in early Monday trading.India's Nifty Fifty index was up 0.86%,and the Sensex index rose 0.82%.US stock index futures were also higher,along with oil futures,while gold futures fell,as did Treasury bond futures.
At a China development conference this weekend,World Trade Organisation Director General Pascal Lamy said the full globalisation of China's trade won't be without challenges.The new Chinese leadership under President Xi Jinping seems to be headed in the right direction on improving market access to China.I heard them saying we want to keep China opening its market,we want to keep internationalising the Chinese economy.
This will be challenging,however,as it faces resistance from domestic players who will not always welcome foreign competition.We want to grow our exports,but we also know we have to grow our imports.This obligates the domestic players to increase their quality and productivity.
Overall,this opening up has worked for China,but that doesn't mean it will happen in a painless way.What is painless is often inefficient,but what is efficient is sometimes painful.
The WTO's influence waned when the Doha Round of trade talks that began in 2001 floundered over the next 10 years.They failed to resolve a rift between developed and developing countries,but new WTO talks have begun.This time,instead of negotiating a big bundle of 20 topics,it is being done slice by slice,bit by bit.
The stumbling blocks in the old talks were US-China differences.No WTO Director General can push the US and China to agree on something if they don't agree,and this is what happened.
A very important negotiation is going on regarding customs standardisation,which would reduce the cost of cross-border trade.We have a problem moving the rule book forward so another layer of trade liberalisation happens,Mr.Lamy observed.
In other regional developments:
The HSBC flash China Purchasing Managers Index for March came in at 51.7,indicating a rebound in Chinese manufacturing.
Luxury retailer Tiffany saw a 13% increase in jewelry sales in the Asia Pacific region ex-Japan.
Goldman Sachs has raised its growth forecasts for the US and Japan.