Two small flags on the sides of the desk. Thus the scene in Tokyo, where the Japanese premier Suga signed on Sunday morning by videoconference, just before his Chinese colleague Li Kequiang, surrounded by red flags. But the other 13 Asian leaders have also chosen to sign in their own way the recp, Or the Regional Comprehensive Economic Partnership, the largest free trade agreement in the world, which will account for 30% of the global economy, 30% of the world's population and reach 2,2 billion consumers, as host country Vietnam proudly pointed out.
The response of the markets is not long in coming: the MSCI Asia-Pacific index this morning rose to its highest level since 1987, up by more than 1% on its highest level since 1987, the year the benchmark was born, which however only partially represents the strength of Eastern finance, given the still modest weighting of Chinese equities in the various funds. Without forgetting that the index does not include the shares of Japan, the third largest in the world economy which, after decades of hibernation, has now awakened: the GDP of the Rising Sun has rebounded of 21,4% annually in the third quarter of 2020, after the collapse of 28,8% in the second and above the 18,9% growth of the Reuters consensus. On a sequential basis, Japan's economy expanded 5,0% versus a previous decline of 8,2% and a 4,4% increase expected by economists. In both cases, this is the best performance since 1980, when the current statistics began to be developed. And at this point, given the evolution of the Covid-19 that has practically disappeared in Taiwan, China, Australia and New Zealand, it is legitimate to hope that the Olympic Games can be held in Tokyo in October.
Stock lists are celebrating everywhere. The Japanese car goes up: Nissan up more than 5% and Mazda up 6,82%. Mitsubishi gained 2,54% and Honda nearly 5%. Tech stocks also traded higher. Tokyo Electron and Panasonic are up nearly 5%. Softbank Group grew by 1,83%. South Korean-listed tech stocks also stood out. Samsung Electronics gained 4,91% and SK Hynix surpassed 9%.
Yet the agreement, which does not include India, is something less than an all-encompassing agreement capable of extending to job protection. But its political value is enormous. Until now, all the agreements entered into by Asian countries were linked to an expansion of trade towards the USA. The Recp, on the contrary, ignores the US partner but qualifies as an embryo of the "made in Asia" to be opposed to the US and Europe in which countries so far in strong opposition, such as Japan and South Korea, participate.
But there are numerous numbers that confirm the golden age of the East, in open contrast with the economic and geopolitical difficulties of the West, bruised among other things by the sovereign choices of America, which today acknowledges the failure of the policy of containment of China through the weapon of tariffs. In October, industrial production in China rose by 6,9% on an annual basis, as in September. But what is impressive is the rapidity of the transformation of the economic structure of the giant. Ten years ago, for example, exports represented 30% of the output of the people's republic, a percentage similar to that of Italy. Today only 18%, confirming the lesser dependence of the Dragon on other economies, including the USA.
Even more impressive the rise of finance: the Shanghai and Shenzhen lists have exceeded the ceiling of ten thousand titles. Alibaba, the undisputed queen of e-commerce, has overcome without too much damage the injury of the non-listing of Ant Group, the fintech freshman withdrawn from listing at the last moment at the request of President Xi Jingping himself who thus punished the independence of Jack Ma, the Jeff Bezos of Asia. An unexpected and unpredictable act, which casts a shadow on the solidity of a financial market strictly subordinated to politics. A limit that, however, sounds like a guarantee for investors. Beijing's stop has shielded the index from the dangers of an explosion of financial speculation on the banks, confirming Xi's financial prudence which is confirmed by the stability of the exchange rate which has fluctuated around 7 renminbi against the dollar for ten years now , and, by the prudence of Chinese stock exchanges, very composed during the pandemic and less euphoric, but still up sharply compared to the beginning of the year, during the recovery. Without neglecting the high yield of Chinese government bonds, which can also be purchased through ETFs, on all maturities. The 3.10-year yield is around XNUMX per cent.
In short, Trump has handed Joe Biden a far more formidable opponent.
