The top 5 economics and finance stories at #AMNC16

As the second largest economy in the world transitions to a knowledge economy growth model, global markets and trade flows are acutely challenged by de-integration trends such as Brexit. The economics and finance agenda at the Annual Meeting of the New Champions explores options for the road ahead.

1. Outlook on China and the global economy

Business, policy and civil society leaders from around the world all want to learn about China’s economic reforms, and the economy transitioning from significant investments in manufacturing and industrial production, to building a service-based knowledge economy. What makes this process unprecedented is the scale at which it happens, as it happens in China. How will China’s new Five-Year Plan, as host of the G20, drive global and regional growth? How will efforts at structuring the markets and maintaining financial stability proceed? As the Chinese economy shifts from an investment to a consumption-driven model, what will be the direction of China’s outbound investments, which over the past decade have seen a ten-fold increase?

Watch: The Chinese Economy, China’s G20 Agenda, Financing China’s Growth Agenda, China’s Global Ambitions and Redefining Made in China.

2. The short and long term implications of Brexit

In a historic ballot on 23 June, Britain voted leave the EU by 52%-48%, with a high turnout of 72%. In global capital markets, this decision was followed by an estimated $2 trillion hit on global stock markets, the largest in one day since 2007, as reported by the Financial Times.

The slide included a $830 billion loss on the valuation of US stocks, with $657 billion struck from the benchmark S&P 500. In currency markets, the pound and the euro fell sharply against the dollar. Whilst initial market reaction to the decision in the context of the expected ‘remain’ decision was strong, participants will want to ask several questions.

Will G7 central banks now further lower rates and inject liquidity into the economies, and what are the implications? Which asset classes will provide for an expected flight to safety? What happens to borrowing and refinancing conditions specifically for financial institutions (in Europe and beyond)? The official programme at AMNC explores the long term road ahead as well: how will business in the UK and Europe be affected? For example, if the sterling weakens further, what will be the implications on operations and assets? What will be impacts on outbound investments, trade and global supply chains?

Watch: Issue Briefing: The UK Referendum

3. Investing in the global economy in the ‘new normal’

Despite initial EMEA currency and equity losses, emerging markets were in fact spared the worst of the initial selling relative to other asset classes in the Brexit market upset. Overall, early 2016 has seen emerging markets bounce back from the distress of 2015, but after the end of commodities super cycle and era of cheap money, will both public and private investors recover new strategies for value generation in emerging and frontier markets? For emerging markets corporates themselves, events such as Brexit challenge outbound investments. For example, Chinese companies’ “going out” strategy in Europe could be at stake.

Watch: The Global Growth Imperative, The New Normal of Emerging Markets, and Global Economic Outlook: the view from Asia.

4. Use, cost and added value of new technologies of the Fourth Industrial Revolution

Concerns about declining productivity in industries and economies impacted by the Fourth Industrial Revolution have been widely shared by economists. Yet sectors in which jobs and operating models have thus far been most disrupted by the new technologies have seen exponential growth in investments. In Asia alone, investors put a record $4.5 billion into financial technologies start-ups last year, four times as much as the previous year. The programme at Tianjin features sessions on what use disruptive technologies across financial services, consumer industries, healthcare and beyond, can have the biggest industry impact, and which will impact the need for regulation? Where are we in terms of stakeholder alignment on use, cost and added value on new technologies in emerging ecosystems?

Watch: Technology Tipping Points, Top 10 emerging technologies, Fintech Fizz, Unblocking Blockchain

5. The road ahead in moving to a greener global economy

A critical global challenge in the context of the Fourth Industrial Revolution revolves around finding policies for climate compatible growth. The historic COP21 agreement on climate change aims to keep global warming from exceeding 2 Celcius compared to pre-industrial levels. An important highlight of the meeting's programme is how countries and companies are translating their commitments into action, and asking what climate change technologies could become game-changers in moving to a greener global economy.

Watch: Global Energy Outlook, Implementing the Climate deal, and China’s green economy

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