Asian risks fragment in light of countervailing trends in China and Japan – ECR Q2 2013 results

Asia’s average score was unchanged during the first half of this year, buttressed by ameliorating sentiment shown toward Japan, the Philippines, Vietnam and Myanmar.

The latter is now attracting substantial investor interest in light of its political development and reforms, although it should not be forgotten that its score of less than 20 points highlights the acute risks evaluated in Euromoney magazine earlier this year (Myanmar still has far to go on road to democracy).

The region had been enjoying improved growth prospects until recently, buoyed by a China-assisted export recovery, when country-risk experts became more concerned by China’s banking system and its potential impact on liquidity and growth (China risk score hits 10-year low amid mini-liquidity crisis).

This has invariably affected other parts of the region, given their close trade and capital flow links, including Hong Kong, Indonesia, Malaysia, Singapore and South Korea, which, despite the improvements in US and Japanese demand, have all witnessed lower ECR scores since December.

The latter is also affected to a limited degree by North Korea, despite the conflict-risk abating as both sides return to the negotiating table.

This article was originally published by ECR. To find out more, register for a free trial at Euromoney Country Risk.