Category Archives: Research
Public mistrust of business and political leaders is hurting the business environment in Asia, according to the most recent Duke University/CFO Magazine Global Business Outlook Survey.
Of Chief Financial Officers surveyed in Asia, 71 percent said lack of public trust is a serious issue and is a drag on the economy.
“Public distrust inhibits the economy from reaching its full potential,” said John Graham, a finance professor at Duke’s Fuqua School of Business and director of the survey. “Mistrust can reduce growth and it causes companies to devote time and resources to counteract mistrust’s negative effects.”
Asian CFOs are also concerned about the impact of sanctions on Russia. In Asia (excluding Japan), 51 percent of CFOs said stepped-up sanctions would have a negative to a severely negative effect on their businesses. In Japan alone, CFOs are even more concerned; 82 percent of CFOs there said the same.
In China, the numbers are a little better than in the entire region, but many CFOs still say the sanctions are a cause for concern.
The controversial cryptocurrency bitcoin is starting to gain wider acceptance in some parts of the international economy, but it has faced many setbacks and challenges in Asia.
In 2013, the Chinese government banned financial companies from dealing in bitcoin transactions. Recently, the People’s Bank of China announced it is temporarily banning Quick Response (QR) code scans for mobile bitcoin payment.
Meanwhile, the biggest blow to bitcoin happened in Japan when Mt. Gox, one of the largest Bitcoin exchanges, collapsed, threatening the bitcoin collections of many investors.
The failure led some skeptics to question the viability of the cryptocurrency.
WATCH PROFESSOR CAMPBELL HARVEY EXPLAIN BITCOIN
Asian chief financial officers fear the impact of a housing bubble, and they’re worried it will hit the breaking point this year.
That is just one of the findings of the latest Duke/CFO Magazine Global Business Outlook Survey, which polled CFOs from around the world, including Asia (with the exception of Japan).
About 70 percent of CFOs in Asia believe there is a real estate bubble in their country and the same number say a deflated real estate market would pose a medium or significant problem to the country’s economy.
“If the real estate bubble were to burst in the world’s second largest economy – China – the reverberations across the globe would be massive,” Harvey said. “The risks in Latin America are also large. Brazil’s economy has stalled, which increases the likelihood that the bubble might burst. While Peru’s economic growth has remained strong, it is worrisome that even there, a bubble poses a threat.”
What should we expect from the economy in Asia next year? Based on the reaction of 245 Asian CFOs who took part in the Duke University / CFO Magazine Global Business Outlook Survey, the outlook is quite positive, notes Professor John Graham, director of the survey.
In the following video, Graham notes that China has solidified, while Japan is waiting for recent reforms to kick in, but overall the mood is on the upswing.