Our keynote speaker Dr Yuwa Hedrick-Wong looks into his crystal ball to offer David Taylor some thoughts on the future for wealth creation in the new global economy – and their implications for property markets in Asia.
How is the global economy likely to shape up over the medium term? And what are the main factors affecting global economic growth?
According to Dr Yuwa Hedrick-Wong, distinguished Professor of International Business at the University of British Columbia, Global Economic Advisor and MIPIM Asia 2012 keynote speaker, there are three main areas affecting the latter. The first and single most important key stress, says Hedrick-Wong, concerns the Eurozone crisis, which is now ‘a given’. But the real risk, he says, is that it spins out of control. ‘At the moment the pattern has been, and I believe will continue to be, that the Eurocrat will somehow manage to do the minimum to kick the can down the road. For the crisis country it is a decade-long struggle to emerge from this crisis condition.’ The trigger for a global ‘contagion’, adds Hedrick-Wong, for failing to contain this, is a banking sector-wide crisis.
The second stress is the rate of recovery in the US. ‘Here, over the medium term, is an interesting mix. We do have a situation of policy paralysis and polarisation within the US itself and my view is that the non-financial corporate sector in the US is experiencing the beginning phase of a long period of economic renaissance; they are redefining manufacturing, and how it is done’. Hedrick-Wong foresees a ‘reindustrialisation’ of the US economy and non-financial US corporations becoming increasingly competitive overseas. And, coupled with an ongoing energy revolution, we will see a structural decline in the US current account deficit. ‘It is a mixed bag – the US recovery will be slow but I’m one of those contrarians; I believe the US economy is in the process, as has happened so many times before, of reinventing itself’.