Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

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In April 2020, the G20, at the urging of the International Monetary Fund and the World Bank, launched the Debt Service Standstill Initiative (DSSI) to mitigate the negative financial impact of COVID-19 in the world’s poorest countries at a time when the pandemic’s medical and economic consequences were highly uncertain.

Under the DSSI, debt-service payments were suspended until the end of 2020, subsequently extended until 30 June 2021 (and new ground rules for debt restructuring for eligible countries have been articulated in a so-called ‘Common Framework’). We focus here…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

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Given the scorching growth of China’s bond market, that sped faster than its economy, over the recent years, it is not surprising that the year 2020 saw increasing foreign investors’ interest. While Covid ravaged economies the world over, overseas investors poured money into China’s bonds attracted, among others, by the compelling yield differential, and seemingly unperturbed by the increasing credit risk.

Foreign holdings of Chinese onshore bonds, for instance, accelerated from 2.96% in September 2020 to 3.2% …


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

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After more than seven years of negotiations, the European Union and China finally reached a deal on a Comprehensive Agreement on Investment (CAI), just one day before the deadline that both parties had imposed themselves, namely the end of 2020.

A lot has been written on the pluses and minuses of this agreement, but the discussion has remained relatively EU-centric. …


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

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Covid-19 will be remembered as the worst global economic shock in recent history but, compared to the most similar one, the Great Depression of 1929, its consequences on asset prices have been radically different.

In fact, the Great Depression started with an implosion of equity prices while the current pandemic started with a sharp correction in asset prices, especially as Covid reached Europe and the US in March last year, but quickly developed into one of the wildest bull markets in recent economic history.

The reason for the diametrically…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

David Martínez Turégano, Senior Economist at European Commission

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The discussion on value chains has heated up since the US-China trade war started in 2018 and, even more so, with the scarcity of certain health products following the outbreak of the COVID-19 pandemic this year. Both geopolitics and security considerations as concerns for the the global supply chain have come to the forefront of the debate, pushing the discussion about the need to reshuffle global value chains further. …


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

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After more than seven years of negotiations, the European Union and China appear to have reached a deal for their Comprehensive Agreement on Investment to go forward right before the deadline pressed by President Xi Jinping at the EU-China summit back in September.

The deal is important politically as it shows the EU’s commitment to its own economic sovereignty without constraints from the U.S. and it follows the example set by the 10-members of the Association of Southeast Asian Nations, Australia, Japan and South Korea in signing the Regional…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

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Asian economies have been hit by the pandemic but differences among countries are striking. Beyond the extent of lockdowns and the size of the policy response, whether fiscal or monetary, the underlying characteristics of Asian economies also explain differences in growth trends.

Countries with the largest current account deficits have suffered, as risk-off episodes have complicated their necessary external funding, constraining their fiscal support. This is the case of India, Indonesia and the Philippines. In turn, the Chinese mainland, but also other economies such as Vietnam and China’s Taiwan…


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

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After more than seven years of negotiations, a final agreement between China and the European Union on a Comprehensive Agreement on Investment (CAI) could be reached before the end of 2020. This deadline was agreed at the EU-China Summit in April 2019 and President Xi reminded European of the importance of striking a deal before year-end during the EU-China Virtual Summit in September.

Here, we first examine the minimum conditions that EU negotiators would want met in order to seal a deal. …


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

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Many Asian economies will age more rapidly over the next several decades, including Hong Kong, Japan, mainland China, Singapore, South Korea, Taiwan and Thailand. Asia’s working-age population peaked in 2015 and will gradually decline at an accelerating rate in the coming decades.

By 2050, the elderly population in these countries on average is expected to increase to 27% from 7% in 1995.

Reduced labor supply creates a drag on growth, but this can be mitigated by higher labor participation, investment in capital-intensive sectors, and government policies that address productivity.


Alicia Garcia Herrero, Natixis Asia Pacific Chief Economist, Bruegel Senior Fellow

COVID-19 has led to the transmission globally of value chain disruptions originating in China and the scarcity of critical medical goods, not helped by an increase in export restrictions imposed by producing countries. These developments have prompted a debate on the resilience of economies in dealing with such challenges. For the European Union, this discussion poses major questions: how has the world’s most industrially-integrated area and largest exporter become so dependent on China for a large number of products, and which sectors are most affected and why?

To answer…

Alicia Garcia Herrero艾西亞

Senior Fellow at Bruegel

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