Author: Shandre Thangavelu, NUS

The ACFTA (ASEAN China Free Trade Area) is one the world’s largest free trade agreements. As of January 2010, it encompassed 1.9 billion people, had a combined GDP of US$6.6 trillion and total trade amounted to US$4.3 trillion. Its Framework Agreement was signed in November 2002 and the Trade in Goods Agreement entered into force July 2005, followed by the Trade in Services Agreement in July 2007. In 2010, the full implementation of zero tariffs for most goods in the FTA is expected for China and the ASEAN6 (Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand), while the CLMV (Cambodia, Laos, Myanmar and Vietnam) will do the same later in 2015.

The key motivations of ASEAN for ACFTA is to access the growing Chinese market in services and manufacturing and to create one of the world’s largest trading areas. Read more…

Author: Shandre Thangavelu, National University of Singapore and ANU

Despite an average growth rate of nearly 8 per cent from 2004 to 2007, Singapore was the first East Asian country to fall into a recession from the current global economic crisis after July 2008. This clearly reflects the greater vulnerability of the Singapore economy to global economic shocks.

The exposure of Singapore’s banks to sub-prime mortgage is limited, due to its well regulated market. The recession came mainly through the fall of the non-oil exports in manufactured goods, induced by the overall deterioration of economic conditions in the US and Europe.

Economic conditions in Singapore have been affected by the huge loss in wealth from the collapse of the stock market that came with global crisis. This depressed domestic demand, reducing consumption and investment in assets. The immediate concern in the ‘liquidity-crunch’ from the financial crisis has been to provide sufficient liquidity in the system. Read more…