Global Markets Overview: Asia Pacific
By Aryaman Merchant, Analyst at York IFS Global Market Telegraph
Coup in Myanmar, Boost in Vaccine Production & “Vaccine Diplomacy”: February’s Asian Financial News
In Shanghai, the SSE Composite Index fell almost 200 points to 3,501.9 points as of 5th March, from its previous all-time high of 3,696 points. The Nikkei 225 fell 6% from its high of 30,467 points on Friday. The Australian ASX 200 and Hang Seng have largely shown stability in the last week, down slightly at 6,710 and 29,098 points respectively as of 5th March.
The only outlier, the BSE Sensex is sitting at an all-time high of 53,119 points as of Saturday, 6th March, as India’s local and global vaccine production and distribution picks up pace.
Early last month, Myanmar’s military forces staged a coup d’état against the democratically elected government, declaring a 1-year state of emergency. The coup comes after just 10 years of democracy in Myanmar, before which the country was ruled by military for almost 50 years. 
According to the Caixin China General Manufacturing Purchasing Manager’s Index, manufacturing output in China has shown positive growth for the last 10 months, however growth has slowed down for the 3rd consecutive month. It is the lowest it has been since May 2020. IHS Markit, the company that makes the Caixin PMI, said, "Prices charged by manufacturers rose solidly as companies looked to partially pass on higher cost burdens to customers"
Stimulated boost in vaccine production and a trend towards normality, India’s economy is showing a path to recovery. This recovery is argued to be “here to stay” according to Anantha Nageswaran, part-time member of the economic advisory council to the Prime Minister. India’s “vaccine diplomacy” and vaccine inoculation program has picked up the pace and is the reason people are optimistic about growth.
In Hong Kong, Chinese authorities are planning the largest overhaul of the Hang Seng Index, with plans to expand the number of listings from 52 to 80 by mid-2022 and to eventually have 100 listings on the Index. The move represents the mainland’s growing influence over the financial hub since taking over.
Chinese President Xi Jinping stated in November that China’s GDP could double by 2035. Head of Asia Economics at Bank of America Global Research Helen Qiao stated that while it could be hard to achieve, some reforms and measures could make it possible to keep up the 4.7% average yearly growth needed to achieve this. Despite this, she warned that issues such as China’s aging population, high debt-to-GDP ratio and investment-led growth model could hurt their economic growth.
On the 25th of February, India and Pakistan issued a joint statement saying both sides agreed to end firing along the disputed Kashmir border. The news is a breakthrough after tensions have been escalating in the last few years, with both countries carrying out airstrikes against each other in 2019.
On the 18th of February, Facebook surprised Australians as they banned news stories on their website in the country. The move came after the Australian government proposed new legislation regarding news in the country. The proposed law claimed to improve negotiations between tech giants like Facebook and news corporations. It was known to be opposed by Facebook, as well as Google.
Since then, however, Facebook has had negotiations with the Australian government and came to a decision to undo the news ban on their website.
India’s vaccine diplomacy has been giving it greater political influence compared to China despite its own local outbreak. Using the Serum Institute of India’s massive manufacturing capacity, the country is sending free vaccines to several developing and emerging nations such as Nepal, Bangladesh and Sri Lanka to aid them in their fight against the coronavirus. Beijing has pledged 3.9 million vaccine doses to numerous countries, while New Delhi has already managed to deliver 6.8 million free doses. The tactic has helped sooth India’s relations with a few countries, especially those where there was an existing diplomatic battle with China.
In the end, the competition between nations to provide vaccines will not only help them, but most likely the rest of the world.
This article was first published in the University of York Investment and Finance Society's Global Market Telegraph (GMT) Edition 16 in early March 2021.
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