Economy

The EU must toughen up its attitude towards China and see the country as an all-out competitor with limited areas of potential engagement, the bloc’s ministers have been advised ahead of talks on recalibrating Brussels’ strategy towards Beijing. The EU should work more closely with the US, strengthen its cyber and hybrid threat defences, diversify its supply chains away from China and deepen ties with other Indo-Pacific powers, according to a paper prepared for member states by the bloc’s foreign service.“China has become an even stronger global competitor for the EU, the US and other like-minded partners,” says the paper, seen by the Financial Times. “It is therefore essential to assess how best to respond to current and foreseeable challenges.” These, the paper says, are likely to “widen the divergence between China’s and our own political choices and positions”.The assessment “admits that China is not going to change”, said a senior EU official. “In short, moving to a logic of all-out competition, economically but also politically.”The paper underscores the significant souring of the EU-China relationship since the existing policy towards Beijing was agreed in 2019, a decline marked by trade disputes, tit-for-tat sanctions and a series of failed efforts to find areas of mutual agreement. China’s backing for Russia in its invasion of Ukraine, its threats towards Taiwan, its attitude towards human rights in Hong Kong and its treatment of its Uyghur minority are all major developments since the EU formed its existing policy, officials said, warranting a rethink.“This is the moment to assess . . . And see if our policy is the right one,” said a second senior EU official. “We have to factor in the serious events that have happened over the past year.”On Sunday, Chinese president Xi Jinping used his speech to the Communist party congress — where he will cement his position as the country’s most powerful ruler since Mao Zedong — to rail against “foreign interference” and “protectionism and bullying” by other countries. The EU document suggests that the bloc’s existing policy of seeing China as “partner-competitor-systemic rival” is outdated. The paper will be discussed by foreign ministers at a meeting in Luxembourg on Monday to prepare for a debate on China by the bloc’s 27 leaders at a summit that begins on Thursday. Arriving at the meeting on Monday, Dutch foreign minister Wopke Hoekstra said: “There is increasing realism in the dialogue with China. We are leaving naivety behind.” Josep Borrell, the bloc’s chief diplomat, said: “A new discussion on China, with a new analysis, is very timely.”The EU’s discussions this week come after the US warned that China was its “most consequential geopolitical challenge”, releasing a national security strategy that warned Beijing “harbours the intention and, increasingly, the capacity to reshape the international order”.“We will prioritise maintaining an enduring competitive edge over the PRC,” the US strategy said.For the EU, China’s deepening ties with Russia, particularly since the invasion of Ukraine, are “a worrying development . . . [that] cannot be ignored”, the ministerial paper says, adding that Beijing’s support for Moscow has “brought China to more directly contest western democracies”.When asked about the FT’s report on the paper, China’s foreign ministry spokesperson Wang Wenbin said: “China and the EU are partners, not rivals. Our economies are closely linked and highly complementary. Our co-operation far outweighs competition.”“We hope the EU side will view China-EU co-operation in an objective manner, expand common interests and contribute to the stability of global industrial and supply chains,” they added. The five-page document includes just one paragraph on areas of limited potential co-operation with China — including climate change, the environment and health — in stark contrast to the existing policy that describes Beijing as “a strategic partner of the EU in addressing global and international challenges”.

The EU’s dependence on China for semiconductors and certain rare-earth metals is addressed as a “strategic vulnerability” by the paper, which calls for more domestic production, diversified supply chains and other initiatives such as better recycling inside the bloc.The EU should also recognise that China’s “activities and positions in multilateral organisations exemplify its determination to systematically promote an alternative vision of the world order, where individual human rights are subordinated to national sovereignty, and economic and social development takes prominence over political and civil rights”, the discussion paper says.“The EU and member states have also experienced increased instances of economic coercion by China, harsher competition in key technologies, cyber and hybrid threats and information manipulation, as well more assertive policies in the Indo-Pacific,” it continues, calling on the EU to promote a “better offer” to third countries that are engaging with Beijing. More

A couple of weeks ago, I spent some time reporting in North Carolina, a red state that has been known to swing blue from time to time. I had a fascinating conversation with a manufacturing executive, who told me, “Sometimes we vote Democrat, and sometimes we vote Republican. But we always vote on trade.”He was referring in particular to the accession of China into the World Trade Organization in 2001, which decimated certain areas of US industry. While this particular gentleman held his nose and voted for Donald Trump in the last election, he was also supportive of President Joe Biden’s trade policies, which have been not just about tariffs but also about higher labour and environmental standards in any new trade deals. The fact that both Republicans and Democrats are rethinking trade policy says something important about our geopolitics. The idea that trade was primarily a pathway to global peace and unity, rather than a necessary way of balancing both domestic and global concerns, is over. We are entering a new era, in which concepts such as Francis Fukuyama’s “end of history” or Thomas Friedman’s “Golden Arches” theory are no longer relevant.All this was expressed quite eloquently in a speech last week at the Brookings Institution in Washington DC, by Canada’s deputy prime minister Chrystia Freeland.Freeland called for an end to the Panglossian assumptions that free trade would necessarily make countries free, and a more clear-headed approach to global capitalism and diplomacy in the wake of Russia’s war in Ukraine and China’s support for Russia.As she rightly put it, “Workers in our democracies have long understood that global trade without values-based rules to govern it made our people poorer and our countries more vulnerable. They have long known that it enriched the plutocrats, but not the people.” Our system of neoliberal globalisation has created more wealth at a global scale over the past half-century than ever before. But there has also been huge growth in inequality within many countries. And there is research to show that the entities that have benefited most from the past several decades of globalisation have been multinational companies and the Chinese state — or more particularly, the people running them.Autocrats have done well too, often by using trade and commerce as weapons in geopolitical conflicts. “With hindsight,” said Freeland, “it is clear that appointing Gerhard Schroeder to the Rosneft board was as essential an element in Putin’s war planning as any military exercise.” Likewise, China restricted Norwegian exports of fish when the Nobel Prize was given to human rights activist Liu Xiaobo. Canadian exports of pork and canola were banned when Canada honoured an extradition treaty with the US and detained the CFO of Huawei.All of these things, like Beijing’s mask-hoarding in the wake of Covid, are understandable from a Chinese perspective. And the west is certainly guilty of its own historical mercantilism and transactionalism. I’ve always thought that America’s embrace of China’s entry into the WTO had more to do with US corporate lobbying than any real belief in the possibility of political change.The point here is that the current system of economic globalisation isn’t going to magically dissolve political differences. We are heading towards a new, post-neoliberal paradigm in which values, rather than just “everyday low prices” as the Walmart retail slogan goes, become a more important consideration in economic policy decisions. The change will come with challenges. I was recently asked on TV how people living on $25,000 a year in the US would fare in a new era of inflation, which will be fuelled in part by the end of the “cheap capital for cheap labour” bargain between China and the west. In the short term, not well. And yet, if you asked these people whether they’d rather have more cheap goods from Amazon or a job that would cover the costs of education, healthcare and housing (all of which have been rising at multiples of the core inflation rate for some time now), they’d pick the latter.Creating those jobs is the opportunity of the new era. In her speech, Freeland laid out the possibilities for “friend-shoring.” This shouldn’t be a closed club, but rather open to any number of countries that will play by the rules. It should also be green: the transition to clean technology is the classic example of a “productive bubble,” in which public support for a transformative technology that is then privatised by companies of all sizes (not just big entrenched monopolies) creates sustainable, shared growth.The US, Canada and Mexico have a real opportunity here. There are plenty of Canadian and American start-ups that hold important intellectual property in the green battery sector, for example. If they can work together and leverage manufacturing capacity and demand in both the US and Mexico, you could see a win for both the economy and the planet. Friend-shoring will have its challenges. But I doubt they’ll be harder or riskier than counting on autocrats for energy and a single geopolitical contentious island, Taiwan, for most of the world’s semiconductors. Let the new era [email protected]’s new book ‘Homecoming: The Path to Prosperity in a Post Global World’ will be published this week More

The writer is president of Queens’ College, Cambridge, and an adviser to Allianz and GramercyAs the global financial crisis shook the world, government leaders came to Washington 14 years ago to compare notes and set the stage for policy actions that would pull the global economy back from the brink. Last week, policymakers met in Washington once more with the global economy in rough waters that leaves the poorest most vulnerable to unfolding shocks.But recognition at the annual meetings of the IMF and World Bank of difficult struggles ahead for so many failed to trigger the global policy momentum seen more than a decade ago.Many policymakers did share common concerns about a global recession, inflation, debt, financial instability and the lack of proper policy co-ordination.But with few new tools, let alone comprehensive solutions getting much traction around policy tables, there is little assurance of a follow-up similar to the April 2009 G20 heads of government summit that helped avoid major and long-lasting economic damage.There certainly was no lack of warning signs in the run-up to last week’s meetings. Inflation remained stubbornly high. Recession fears were mounting. Financial markets were volatile. The UK had experienced disruptions more familiar to struggling developing countries. And, in its update of its World Economic Outlook, the IMF had just warned that “the worst is yet to come”.There was also an active blame game. Most of the participants pointed the finger at the adverse effects of Russia’s invasion of Ukraine. Many of them also complained that the speed and scale of the US Federal Reserve’s catch-up interest rate rises had turbocharged disruptive dollar strength and pushed global yields higher.The IMF was cited for lapses in its surveillance and policy co-ordination roles. The fund and the World Bank were pressed to do more for vulnerable developing countries. Adding to all this was the notion that, just as in 2008, it was once again the advanced countries that had become the world’s major sources of volatility and systemic risks.With all that is play, the mood in Washington was as grim as the one I remember from the October 2008 annual meetings.Back in 2008 though, the analysis of big common problems, the fear of yet bigger ones ahead and the respect for collective responsibility acted as catalysts for serious policy work. That culminated in UK prime minister Gordon Brown quarterbacking the April G20 summit that delivered bold and co-ordinated policy response that averted a devastating global depression. Given the insufficiency of tools, much more will need to be done in the months ahead for a similar outcome this time around.Top economic officials are going back to their capitals with the dispirited view that the global economy may slip into recession. Smooth global financial market functioning cannot be taken for granted and, with debt also an issue, the phenomenon of “little fires everywhere” is likely to spread. And even though there is an urgent need again for visionary G20 global policy co-ordination, the ability to act is hindered by various geopolitical tensions.Officials also feel that little can be done to stop the adverse spillovers of policies implemented by some of the world’s most systemically important policymakers. This is particularly the case when it comes to the Fed.Many country officials, especially from the developing world, have gone home worried that a late Fed has no choice but to continue on an aggressive rate-rising cycle that imposes on them one or more unpleasant policy options. These include: tightening monetary and fiscal policy beyond what the domestic economy would otherwise warrant, depleting international reserves, allowing a further currency depreciation that adds to inflation and makes it harder to pay back international debts, and/or imposing distortive foreign exchange controls.As important as it is, the most critical message of these annual meetings is not that the global economy faces treacherous times ahead that threaten to be particularly damaging to the most vulnerable countries and the weakest members of society.It is that the tools, mechanisms and frameworks for collective action are struggling; and that the need for each country to rely heavily on whatever individual relief they can muster will inevitably lead to a suboptimal outcome for them and for the world as a whole. Hopefully, this will then serve as the beneficial catalyst that the October 2008 meetings ended up being. More

After two years of port congestions and container shortages, disruptions are now easing as Chinese exports slow in light of waning demand from Western economies and softer global economic conditions, logistics data shows.
“The retailers and the bigger buyers or shippers are more cautious about the outlook on demand and are ordering less,” logistics platform Container xChange CEO Christian Roeloffs said in an update on Wednesday. 
“On the other hand, the congestion is easing with vessel waiting times reducing, ports operating at less capacity, and the container turnaround times decreasing which ultimately, frees up the capacity in the market.”

Container freight rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on routes between Asia and the U.S. have also plunged, logistics data shows.
Anucha Sirivisansuwan | Moment | Getty Images

After two years of port congestions and container shortages, disruptions are now easing as Chinese exports slow in light of waning demand from Western economies and softer global economic conditions, logistics data shows.
Container freight rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on routes between Asia and the U.S. have also plunged, data shows. 

“The retailers and the bigger buyers or shippers are more cautious about the outlook on demand and are ordering less,” logistics platform Container xChange CEO Christian Roeloffs said in an update on Wednesday.  
“On the other hand, the congestion is easing with vessel waiting times reducing, ports operating at less capacity, and the container turnaround times decreasing which ultimately, frees up the capacity in the market.”

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The latest Drewry composite World Container Index — a key benchmark for container prices — is $3,689 per 40-foot container. That’s 64% lower than the same time last September after falling 32 weeks in a row, Drewry said in a recent update.  
The current index is much lower than record-high prices of over $10,000 during the height of the pandemic but still remains 160% higher than pre-pandemic rates of $1,420. 
According to Drewry, freight rates on major routes have also fallen. Costs for routes like Shanghai-Rotterdam and Shanghai-New York have fallen by up to 13%. 

The falling freight rates tie in with a “sharp drop” in container shipments that Nomura Bank has observed. 

Nomura, quoting data from U.S.-based Descartes Datamyne, said container shipments from Asia to the U.S. for all products except rubber products in September are down year on year.
“We assume that the sharp drop in container shipments largely reflects US retailers stopping orders and reducing inventories due to the risk of an economic slowdown,” Nomura analyst Masaharu Hirokane said in a note on Wednesday, adding that the bank has yet to see signs of a sharp fall in U.S. retail sales.
Port throughput around the world has also dropped. When Shanghai reopened after its recent lockdowns, port traffic volumes lifted but weren’t enough to offset the “wider downturn in port handling levels,” Drewry said. 

What’s different now

In Europe, sliding container prices and rates reflect declining consumer confidence, Container xChange said. 
“The European market is finding itself flooded with 40-foot high-cube containers. As a result, the region is experiencing a fall in the prices of these boxes,” Container xChange said. 
The trends in logistics and supply chains from the past two years have reversed, logistics companies said. During that period, container shortages were constant as a result of delays at ports affected by lockdowns and soaring demand.

In Europe, sliding container prices and rates reflect declining consumer confidence, Container xChange said.
Nurphoto | Nurphoto | Getty Images

But now, demand for containers is falling and so are their rates, Seacube Containers chief sales director Danny den Boer said at the Digital Container Summit held earlier this month. 
Idle time for containers is also on the rise, Sogese CEO Andrea Monti said at the same conference.   
“Containers are stacking up at a lot of import-led ports. Shippers are giving containers away just because containers are being stuck there,” said Container xChange account manager Gregoire van Strydonck at the conference. 
India’s Arcon Containers CEO Supal Shah said factories in China have stopped production for the foreseeable future. 
“We heard four months,” he said at the Digital Container Summit conference.
“The container depot space is full in China, Europe, India, Singapore and most parts of the world.”

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SEOUL (Reuters) -Shares in South Korea’s Kakao Corp plunged more than 9% on Monday after a fire at a data centre south of Seoul damaged servers on the weekend, causing an extensive service outage in the country’s main chat app.The outage of the chat app, predominantly used in South Korea for both private and business exchanges, as well as services including payments and gift exchanges, taxi hailing, maps and log-in access for other apps, crippled communications in Asia’s fourth-largest economy. President Yoon Suk-yeol said on Monday that Kakao’s services are “like a fundamental national telecommunications network as far as the public is concerned,” and follow-up measures over the service outage will be pursued.”If the market is distorted in a monopoly or severe oligopoly, to the extent where it serves a similar function as national infrastructure, the government should take necessary measures for the sake of the people,” Yoon added, noting South Korea’s antitrust watchdog would examine the matter.Kakao shares fell to its lowest since May 2020, while shares in Kakao affiliates KakaoPay and KakaoBank also plunged more than 8% in morning trade.A Kakao spokesperson told Reuters on Monday services such as messaging have been restored, but miscellaneous services are still being restored.Police and the National Forensic Service plan to conduct their second examination on Monday at the data centre, which is operated by SK C&C. After an initial probe on Sunday, police said electrical issues around battery racks in third basement floor may have caused the fire. Kakao’s messenger app Kakao Talk has more than 47 million active accounts in South Korea and 53 million globally, the company said in a report in August.Kakao said on Monday the financial effects of a widespread service outage were expected to be limited on Kakao and its key units. More

TOKYO (Reuters) -Japan will respond firmly to excessive currency fluctuations, its top currency diplomat Masato Kanda said, following the yen’s sharp fall to a 32-year low to the dollar.”Each country would respond appropriately” to an agreement on foreign exchange market moves by the Group of Seven (G7) and G20 meetings last week, Kanda, vice finance minister for international affairs, told reporters at the Ministry of Finance.Kanda made the comment as the Japanese currency hovered close to a 32-year low near 149 yen, stoking concerns about boosting already high import costs that are squeezing households and companies.That sharp decline comes despite Japan’s intervention in the foreign exchange market last month to prop up the yen, its first such effort since 1998.Once welcomed for giving exports a boost, the yen’s excessive weakness could hurt households and retailers by inflating already rising prices of imported fuel and food.In addition, the yen’s sharp falls heighten uncertainty for firms in making business decisions.The yen has depreciated around 20% this year, as the Bank of Japan (BOJ) has kept policy super loose while many of its global peers, such as the U.S. Federal Reserve, have aggressively raised interest rates to combat surging inflation.Separately, Finance Minister Shunichi Suzuki said on Monday authorities would take decisive steps against excess currency moves driven by speculation, the Nikkei business daily reported.”We’re constantly watching currency movements with a sense of urgency, the Nikkei quoted the minister as saying. More

BEIJING (Reuters) – By any account, $1 trillion seems huge. That’s the scale of budget shortfalls facing Chinese provinces, reducing their fiscal firepower to fund infrastructure spending and tax cuts, and raising risks for the world’s second-biggest economy in 2023.The timing couldn’t be worse for policymakers in Beijing, as the economy wobbles under the weight of global recession risks, surging commodity costs, rising geopolitical tension and widespread COVID-19 lockdowns at home – spoiling the backdrop of a once-in-five-years congress of the ruling Communist Party that got underway on Sunday. Local governments have long been a pump-primer of China’s growth, but declining state land sales revenue in the wake of an ongoing crackdown on debt in the sector has severely eroded their financial power – a situation exacerbated this year by China’s feeble growth, weak tax income and crippling COVID restrictions.Local governments must also make debt payments in coming months, portending more financial pain and limiting their ability to meet Beijing’s requests to boost spending. Already, many of them have resorted to cutting salaries, reducing headcounts, lowering subsidies and even imposing disproportionately hefty fines to meet budget shortfalls. In the first eight months, China’s 31 provincial-level regions reported a gap between general public revenue and expenditure totalling 6.74 trillion yuan ($948 billion). That’s the widest for the period since at least 2012, Reuters calculations from local government data in the past decade showed, with the populous provinces of Sichuan, Henan, Hunan and Guangdong suffering the largest shortfalls. In the same period, government land sales, counted separately, tumbled 28.5% year-on-year to 3.37 trillion yuan, adding urgency to the need to restore the financial health of indebted real estate firms.”With the slower growth this year, we expect fiscal deficits for regional and local governments will remain substantial, reflecting the property slowdown and lingering effects of the coronavirus shock,” said Jennifer A. Wong, analyst at Moody’s (NYSE:MCO), which expects 2022 economic growth to slow to 3.5% from 8.1% in 2021. In the past, shortfalls were largely offset by transfer payments from the central government and carryover funds from previous years, but analysts say cooling economic growth may limit any such help this time around.Policymakers will also be wary of picking up the fiscal slack with large-scale monetary stimulus as a wave of global interest rate hikes to rein in red-hot inflation has sent U.S. bond yields soaring, widening the yield gap between U.S. and Chinese debt.DEBT STRESSTreasury bond quotas could be increased, so that some of them could be transferred to local governments to ease their fiscal stress, said Luo Zhiheng, chief macroeconomic analyst at Yuekai Securities. However, they face a squeeze on their already tight cash-flows as maturing local government debts peak in 2023 for the 2021-2025 period, Luo warned.Combined with some maturing debts of local government financing vehicles (LGFVs) – investment companies that build infrastructure projects – this year and the next will be most stressful for local governments, he said. Around 380 billion yuan of onshore LGFV bonds from economically weaker provinces are due for repayment in the next 12 months, according to a Moody’s report in August.Such fiscal constraints, together with weakening exports, doubts over a consumption revival and external uncertainties including the Ukraine war, would add pressure on policymakers to shore up the economy in 2023, said Nie Wen, a Shanghai-based economist at Hwabao Trust. Nie is forecasting GDP growth of 5.5% next year, assuming few or no COVID-19 disruptions, better than the broad 3.2%consensus for this year but still lagging the pre-pandemic 6.0% pace in 2019.’HEAVY BURDEN’Highlighting the pressure on finances, the provinces of Shandong, Shanxi, Henan, Zhejiang as well as the municipality of Tianjin said they had all shed budgeted headcounts at government agencies in recent months.Moreover, some grass-roots market regulators have even imposed excessively high fines on small businesses to boost revenue. According to financial media outlet Yicai, local governments’ revenue from fines and confiscations jumped 10.4% in January-July year-on-year.Additional spending on containing COVID outbreaks has also strained local government finances.The fiscal stress is cutting into some households’ income, a red flag for consumption and broader growth. “My annual income was slashed by 27% to around 80,000 yuan last year, due to the very heavy local fiscal burden,” an employee surnamed Gao at a government agency in Chongqing told Reuters. “Our leaders were very anxious these days as they said the current fiscal allocation is not enough at all. As there is no way out, they have had to ask the local government fiscal department for money.”($1 = 7.1135 Chinese yuan renminbi) More

SINGAPORE (Reuters) – Indonesia’s currency is tumbling and foreign money in its bond markets is heading for the exits, stoking fears that Southeast Asia’s largest economy is finally starting to crack after months of remarkable resilience against global headwinds.Despite its history of merciless market drubbings during times of global economic stress, Indonesia was a surprising outperformer until August, buoyed in large part by its exports of gas, palm oil, and other prized commodities.Its stock market is Asia’s best performer this year and the rupiah fell just 3% in the six months to end-August against a forceful U.S. dollar, while South Korea’s won and the Thai baht both dropped more than 10%.But September brought a turn for the worse as the rupiah slid 2.5%, its largest monthly fall this year and more in line with its Asian peers, leading analysts and investors to raise alarm bells over old, familiar risks: dwindling currency reserves, rising debt obligations and foreign capital flight.”It’s a catch-up, or catch-down, kind of effect,” said Galvin Chia, an emerging markets strategist at NatWest Markets. He blamed the currency’s stumble on volatile external factors including the dollar’s relentless climb.But this time around, market experts say, will be different, as Indonesia’s relatively solid economy and monetary policy will help it to resist the sort of battering it endured in crises past.”You still have reasonable carry, you still have a central bank, now at least, more proactive, and has a lot of credibility, and you still have the tailwinds from the commodities,” said Ihab Salib, senior portfolio manager and head of international fixed income group at Federated Hermes (NYSE:FHI).”I think all of those together, to me, point to Indonesia maybe outperforming on a relative basis.”The rupiah’s historic vulnerability owed to its status as a risky but high-yielding “carry” trade, attracting high foreign ownership of Indonesian bonds when yields in more developed markets offered relatively paltry returns.During the Federal Reserve’s previous tightening cycle in 2018, the rupiah fell to multi-decade lows. During the 2013 “taper tantrum”, it plunged 20%.RUPIAH DOWNTURNBut rising commodity prices have been a backstop this year, with a widening current account surplus providing a cushion against capital outflows. Foreign ownership of Indonesian bonds, which used to be as much as half the market a decade ago, is also lower, around 14%.Yet Indonesia’s yield advantage has been evaporating as rates elsewhere rise faster. Outflows from the bond market, where yields are as high as 7%, reached $11 billion in the first three quarters of 2022, nearly double the $5.7 billion for all of 2021.”I suspect it’s more of a delayed reaction,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank, regarding the rupiah’s recent downturn.”There are some exceptional factors, but none of these would provide that kind of panacea for underlying risks that remain.”With no signs that the surging dollar will peak anytime soon, Varathan highlights risks that Indonesia’s external debt obligations and falling currency reserves could become a worry at the same time domestic policy tightening hits growth. “If these things start to conspire … we could get a pretty abrupt episode of capital outflows.”Indonesia’s foreign exchange reserves fell by $1.4 billion last month to $130.8 billion, due to debt payments and Bank Indonesia’s efforts to stabilise the rupiah.Data for September also showed a surge in Indonesia’s inflation to a seven-year high, reflecting a jump in fuel prices.The stock market nonetheless remains a bright spot, as investors bet that prices of the oil and other resources that Indonesia exports will stay high. Jakarta’s benchmark index, up more than 3% year-to-date at Friday’s close, is among only a handful with gains this year, along with Brazil’s Bovespa Index which is up nearly 7%.Bank Indonesia, which until recently was one of the world’s last dovish central banks and drew concerns about complacency over inflation, also reassured markets last month with a surprisingly aggressive rate hike of 50 basis points, which it cast as a pre-emptive measure to rein in inflation expectations.”Indonesia remains a very good story in the Asian portfolios,” said Rajat Agarwal, an Asia equity strategist at Societe Generale (OTC:SCGLY) SA.”If you look at consumption, look at credit growth, everything is domestic, unlike the other export markets in Asia. Indonesia would be one of the more resilient markets in the current backdrop.” More