Friday, 20 November 2015

China's trade surplus - The Economist

Despite the continuing global demand for Chinese products, there is one more element that has been playing a crucial role in ensuring China's trade surplus in the recent years. It's the renminbi - the Chinese currency.

Being an export-heavy nation, China knew that it had to keep its currency lucrative enough for its trading partners. This incentivized China to keep the value of renminbi low and a managed float seemed to be a feasible way. Besides, this also eliminated the level of payment uncertainty from the minds of Chinese exporters and importers.

Benefits of the Managed Float System vis-à-vis the Fixed Exchange Rate Regime

· Ability to ease out the strict capital controls that were in-built into the system to facilitate a fixed exchange rate regime

· Accumulation of low-yielding foreign reserves (compared to other forms of domestic investments within China) due to more demand for renminbi was a major cause of concern under the fixed regime. Along with this, inflationary pressures were always prevalent. With a flexible system the impact of such issues can be reduced as circulation of renminbi within China can be controlled in a better manner.

· Huge exposure to USD (around 50% of GDP) as the primary foreign reserve means that even a marginal drop in the value of USD can be detrimental to the Chinese economy. With flexible regime, this risk can be eliminated to a certain extent as depending on situation, China can take up exposure in other non-US foreign reserves in a better manner.

The Ultimate Goal

From the above discussion it can be seen that China made a smart move to switch from the fixed exchange rate regime of the late nineties to the managed float system in 2006. In the process, renminbi appreciated 21% against the dollar before it was again repegged to the USD in August 2008 in a move to protect Chinese exporters who felt the heat of diminished consumer appetite amidst the global sub-prime crisis ignited in the US. As demand conditions started improving, renminbi was again moved to the managed float system. This move was also seen as a precursor to the People's Bank of China (PBOC) inching towards making renminbi a global reserve currency. Although this is far from reality, China has made progress in inking trade agreements with selected countries and launched a series of currency swap agreements with more than 20 central banks around the world.

Sunday, 15 November 2015

Abu Dhabi Best Residential Locations 2016

Al Reem Island continues to be essentially the most searched location in Abu Dhabi for property buys and leases, following the most recent statistics. Beside from confirming Reem Island's constant rating, the fourth quarterly report launched by UAE primarily based property portal PropertyFinder additionally states that Reem Island has been gaining on reputation as well.

After reviewing roughly two million investors, the portal concluded 18.67% of individuals have been looking out to purchase properties in Reem Island whereas 18.41% of individuals had been trying to lease in the identical location. The group that topped the record for many searches associated to property purchases or leases occurred to be western expatriates who've just lately moved to the UAE.

Based on the report, the waterfront promenades, sea view properties and small-city attraction are a number of the components that make Reem Island such an exotic location for residential living. It presents a holiday-like escape to residents with easy accessibility to business infrastructure and social interactivity.

Whereas the best 5 areas, most searched, to lease property remained the identical in all four quartiles of the year, there have been some adjustments within the different spots on the checklist. As an illustration, Al Reef discovered itself rating approach good on the fourth quarterly listing after shifting up 5 locations from the earlier quarters, and Al Raha Beach discovered itself rating good on the listing regardless of not being on it in the past. Al Ghadeer nevertheless, lost interest by some followers over the months and declined in reputation. It ranked decreased within the fourth quarter after rating sixth and eight within the second and third quarters respectively.

Khalid Suleiman, Sales Director of Nationwide Middle East Properties, believes that there is a rise in the sale and rent prices throughout the UAE as a result of the broad restoration within the residential market over the previous few years. He has added some mid-market communities like Al Reef, Raha Beach and Golf Gardens in his checklist of examples.

As of now, properties in Abu Dhabi market appear to have rebounded with costs of properties going up by greater than 20%. New property projects are being launched every next week because the demand for actual property appears to be at its peak.

Khalid Suleiman listed number of locations which he considers to be among the best places to have a property rented or to actually buy one whether it is a home or an business office.

Top Eight Most Searched Locations in Abu Dhabi

Al Reem island

Al Reef Downtown

Raha Beach

Saadiyat Island

Gold Gardens

Al Ghadeer

Hydra Village

Khalifa City

With the publishing of this report, interested people thinking about purchasing or renting property in Abu Dhabi will now discover it simpler to make their selections. Other than these locations in Abu Dhabi, property costs throughout Dubai are believed to have gone down so those looking for houses within the UAE may make a research within the Dubai state as well.

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