•  The global economic backdrop of slow and diminishing growth forecasts is being exacerbated by the financial drama occurring in countries as diverse as China and Greece. There is no end in sight to this morass, because everywhere, incremental policy-making prevails. “Incrementalism” gives the impression that issues are being dealt with, but this is nothing but an illusion, for it fails to offer long-lasting solutions and the promise of a better tomorrow.
• On June 12 having peaked at a price corresponding to 85-times earning (almost 5 times the world average of 18.5!), the Chinese stock market bubble began to implode, in 10 days wiping out more than $3 trillion of its value. The government only succeeded in stabilizing the market by threatening to arrest sellers: a victory that will eventually prove self-defeating. It lays bare the insurmountable contradiction of a market economy trying to co-exist with a one-party, centrally planned political system. Further volatility is a given. It will unnerve global markets for months to come. Most importantly, this gives plenty of ammunition to those who doubt the Chinese leadership’s ability to implement the vast array of structural / pro-market reforms required not to fall into the middle-income trap.
• In June, Singapore’s GDP contracted by a much larger than expected 4.6% (Q-o-Q). On the global scale, the city-state’s economy is tiny, but Singapore is considered as the canary in the mine of Asia’s economy. The figure therefore suggests that China isn’t achieving anywhere near its 7% growth target.

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