I have spent a week in Asia, 40 hours flying to four countries in five days and have returned to find out that someone turned Winter off and Spring on instead. B&Q are likely to see barbecue sales go through the roof….
Singapore's economy is in full boom. As usual. There aren't enough workers in the country to fill the jobs available in bars, coffee shops or driving taxis. Reclaiming land from the sea just continues. The last time I was there, the Marina Bay Sands hotel ($3.5bn with a gigantic surf board on the top, a vast pool and a casino) was surrounded by building work. Now, it's surrounded by the Marina Bay Shoppes (sic). And a light show in the evening. A thriving economy has diversified into tourism and casinos, at pretty much exactly the same time as a newly-affluent Asian middle class took to the airways and started going on holiday. The post-2008 collapse in trade was followed a bounce pretty quickly, Singapore's banks escaped relatively unscathed from the crisis and now it's all go.
The investor community in Singapore listen politely to views about Europe, the US and financial markets in general, but the conversation pretty quickly turned to the Renminbi. Singapore is the private banking hub for Southern Asia, and benefiting from the combination of an ever-appreciating RMB and higher yields than are on offer in either US or Singapore dollars, is one the most popular investment strategies for their high net worth clients. The general view or hope of these investors is that the current PBoC-induced volatility in the USD/CNY rate is just a blip, which will not stand in the way of their investment strategy.
From Singapore to Seoul, a 5 1/2 hour overnight flight followed by a day of meetings. Really, I remember less of them than I should - I just wanted to sleep! I found a spa in the airport to shower, shave and try to calm my cold down in a sauna, then took the train into the city rather than a cab because it is so much cheaper. I've been visiting Seoul for over 20 years and it has transformed from 'developing' to 'developed' more impressively perhaps than any other city I visit. In the early 1990s it was full of identical black saloon cars and utilitarian-looking buildings. Not any more.
Beijing, by contrast, has become a hard place to visit. I was lucky to have a day of clear skies and breathable air but the traffic is awful, cars nose to tail where not that many years ago bicycles outnumbered cars. Here, the conversations were about investment in Europe, with a fascination for Australia and Canada too, but when the talk turned to the domestic currency, I sensed nervousness and uncertainty. That is unusual in Beijing, a place where there is usually certainty about the authorities' goals and little doubt that they will be successfully achieved.
Hong Kong is an astonishing city. The drive in from the airport is a reminder that this is a major trade hub, as you pass container ship after container ship. More the one person though, tells me that the luxury shopping brands and stores are doing less well now. The Chinese slowdown is being felt here. As for the clients, we were back to talking about China. I was asked how far I think the USD/CNY rate may rise and retorted that if the idea was to reduce the appeal of the 'carry trade', then what I learnt in Singapore is that those buying the Renminbi are not feeling dissuaded yet. The glib remark that from the current 6.15, we are more likely to see the rate at 7 than 5 in the coming years caused real concern until I qualified it by saying that neither of these levels is likely. What did I learn is that a 2 1/2% depreciation is causing more anguish than a fall that magnitude should. And by association that there is more leverage in the trade than I had realised. That increase in leverage makes me concerned, particularly in the wake of the announcement this weekend that the daily trading band for USD/CNY is being widened.
A note at the end. I've ben jotting down the price of a tall latte at Starbucks stores around the world for many years. This week, I paid SGD 5.60 (£ 2.66) , KRW 4400 (£2.47) , CNY 27(£ 2.64) and HKD 31 (£2.40), all of them more expensive that the £2.25 I get charged in london, the steady widening of the price differential between Beijing and Hong Kong perhaps the most striking feature.