The items listed below represent potential emerging issues that our analysts are tracking. These can be long term or short term, but will be updated daily. If an item on our Watch List becomes critical, we will email you a full analysis explaining its significance.
Each Saturday, we will follow up our daily Watch List for each week with our conclusions on these issues.
- China: On June 10, several hundred people in Shanghai protested a new local regulation meant to curb housing purchases. Fewer purchases means fewer sales, and many people who had tied money up in construction projects now fear that they will be unable to liquidate their investments. As a result of the protests, some concessions were given to people who purchased certain types of residential property in Shanghai. The Communist Party is attempting to restrain housing prices and has implemented area-specific controls around the country, such as higher down payment requirements. Over the past several months, housing prices have begun to decline in some top-tier cities, including Beijing. We need to watch to see if these protests remain contained or if they spread to other cities as the central government continues its campaign to halt housing price inflation.
- Germany: Germany’s statistics agency Destatis reported a 0.9 percent increase in exports in April compared to March, but a 2.9 percent decrease year over year. The most interesting part of the report is that Germany has seen growth in demand for its exports from China and India. We are constantly watching Germany’s economy and export figures, and data for one month is relatively meaningless, but the increase in exports to China and India bears deeper scrutiny.
- Singapore: Singaporean Prime Minister Lee Hsien Loong, the son of the city-state’s founding father, has come under heavy criticism from his siblings in a rare display of political drama. Real shifts in Singapore’s power landscape are uncommon, and its institutions and meritocratic political culture are seen as having matured enough that stability is not dependent on whether the founding family remains in power. Nonetheless, Singapore’s geopolitical relevance is derived from its role as a facilitator of regional trade, finance flows and Western-led security initiatives – a centrality derived in part from a level of political and policy certainty unmatched in the region. The links between Singapore’s assumed political stability and broader geopolitical relevance could be tested if substantive political competition takes root – particularly at a time when the city-state’s competitive advantages are under pressure by, for example, Chinese infrastructure investments in Malaysia and the growing potential for disruptions in the South China Sea. We need to look for signs of deeper splits beneath Singapore’s superficial stability.