China’s new housing foundations

Insight: China’s government last Friday launched its biggest effort yet to revive the country’s ailing real estate market. The central bank is providing up to RMB 1 trillion (USD 138 billion) of funding to banks, state companies and local governments to buy up unsold homes, even as prices keep falling and developers are reducing new construction.

Impact: With the property sector generating a third of GDP, its fortunes are vital to the country’s economic recovery. And Beijing is pulling all the levers at its disposal, with this ‘historic’ support package coming on top of earlier measures, including a reduction in mortgage rates. Analysts remain concerned about the size of the problem: Goldman Sachs estimates unsold inventory may be as high as RMB 13.5 trillion. However, the government is aware that too much intervention could further depress prices for existing homes and force more developers into distress. This balanced package should help stabilize the market for now and lay a foundation for Beijing to provide more support as required.

9 billion

This is the amount in USD that Amazon will invest in Singapore’s digital infrastructure over the next four years, mostly to build, operate and maintain data centres. It shows how rapidly investment in web services and AI applications is picking up, matching Amazon’s spend rate for the previous 13 years in just a third of the time. And the online retailer is not alone in its focus on Southeast Asia: Microsoft recently announced billion-dollar investments into Malaysia, Indonesia, and Thailand.

Insight: William Lai Ching-te was sworn in as Taiwan’s fifth popularly elected president on Monday. On the surface, cross-strait relations seem to be top of agenda, with the island’s new leadership preparing for what experts predict will be an uneasy stand-off with Beijing over the next four years. However, faced with growing dissatisfaction among many Taiwanese on local issues, Lai may need to look closer to home to address his presidency’s greatest challenges. 

Impact: Earlier this week, thousands of people attended a rally brandishing guava fruits, a pun on a Hokkien term for a bounced cheque, criticizing Lai and his Democratic Progressive Party for failing to implement social reforms and deliver on promises. Taiwanese voters are increasingly frustrated with festering domestic issues including rising housing costs, slow income growth and narrow career prospects. The tight presidential race in January and the rise in popularity of a new third party – the Taiwan People's Party – focused on domestic revitalization, reflects apathy towards geopolitical issues, and declining trust in both the US and China. Lai must respond meaningfully or could soon find that he has no credit left with his fruit-wielding public. 

Insight:  Japan, host of the 2025 World Expo in Osaka, and Saudi Arabia, which will host the 2030 edition in its capital, held a long-awaited business summit this week. The two countries signed more than 30 commercial agreements, spanning sectors from energy to entertainment, even though Crown Prince Mohammad bin Salman, the Kingdom’s de facto leader, cancelled his trip to Tokyo at the last minute due to concerns over his father’s health. 

Impact: The fact that the success of the summit was not derailed by the sudden absence of MbS, the driving force behind Saudi Arabia’s modernization, shows how willing companies from both sides are to do business with each other. And the deals announced go well beyond the traditional supply of oil, with Japan investing in renewable energy projects in the Middle East and Saudi keen to tap Japan’s experience in cultural fields from tourism and entertainment to professional football and manga comics. Trade these days is as much about soft power as about raw power. 

FGS Global’s sustainability experts on navigating the climate diplomacy calendar.

Insight: Last summer was the hottest globally in 2,000 years, according to sobering research published recently by the journal Nature. The impact of ‘extreme heat’ is being felt across Asia. Last month, a record-breaking +40°C heatwave in many countries, including Thailand, Vietnam, and the Philippines, caused widespread disruption to educational, economic, and agricultural activities, as well as heat-related illnesses and deaths. Many climate experts warn that climate change is exacerbating the frequency and severity of extreme weather events. Governments are under increasing pressure to find solutions that will limit global warming to under 1.5 °C, with the UN's lead climate official now claiming that humanity has 'two years to save the world'. 

Impact: With such dire predictions, the future looks a little bleak. Global conflicts and economic uncertainties also cloud the way forward. However, according to our FGS team, climate diplomacy is quietly making progress, with last year's COP28 in Dubai setting a positive precedent for future action at COP29 and 30. The private sector has a crucial role to play in the climate policy arena, for example on global climate finance, and can use these major events to engage effectively. But it's no longer a question of just showing up. How you show up – and demonstrate the real-world impact around key issues – is increasingly important to stakeholders in Asia. A comprehensive and integrated strategic communications approach is now crucial. 

Read more on how to maximize your climate diplomacy impact