Fact of the Month

Chinese officials see 8% of the country’s foreign trade being settled in Yuan by the end of 2011 versus .5% last year.

Source: WSJ

Feature of the Month:

During the previous recession, governments around the world greatly increased stimulus spending in an attempt to reduce unemployment and fight dropping GDP. This massive spending has pushed national debt in some countries to levels that rating agencies see as irresponsible and is forcing governments to make tough fiscal decisions or risk losing their high-quality ratings. Economists are worried that any rash austerity measures would cut important spending just as economies are showing signs of slowing down, possibly causing a second recession. Determining what will happen with the global economy and how governments will respond is anyone’s guess but for proactive executives there are still plenty of opportunities to take advantage of.

If governments decide to balance their budgets, they have two options: cut spending or increase taxes. Both options have strong support, potential benefits and possible unintended consequences. Increasing taxes is an easy way to quickly fill government coffers but it can also cause spending to drop - possibly hurting the recovery. While this sounds unpopular, some top-earners from the United States and Europe have suggested that they are willing to pay for a larger percentage of the nation’s tax bill in order to help their countries. Spending cuts could be just as painful, especially when combined with weak private sector spending. Many countries including the United States, Great Britain, France and Italy have already passed cuts and are waiting to see the impact on their economies. If either of these measures are used too aggressively, the slowing growth could cause lower tax revenues and the fiscal situation could enter a downward, self-feeding spiral.

Despite the uncertainty, investors and smart executives have found ways to profit in the current environment. One industry that has been profiting from the recent uncertainty is dollar and other discount stores. These stores sell off-brand products at steep discounts that many shoppers appreciate in the current weak economy. Others are finding opportunities by looking to new growth industries that will not be impacted as much from a slowdown in the global economy. In the United States and Europe, many leaders are looking to in-home nursing care, physical therapy and biotechnology as a way to profit from the aging population.  There is also growth in areas of technology such as cloud computing, VOIP and e-commerce.

From the globalEDGE Blog

In today's globally connected world, policy decisions in a few key countries can have wide-ranging effects in many countries. Check out the globalEDGE Blog to see how spending across the world is affecting emerging markets.

Featured Resources

IMF: International Monetary Fund
The International Monetary Fund (IMF) is an international organization established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements. The web site provides a broad range of useful tools, data and information on international finance, a rich weekly news section and an international financial database for free. The site is also available in Arabic, Chinese, French, Japanese, Russian and Spanish.
Category: Finance

Argentina: Buenos Aires Herald
The international newspaper of Argentina updates the site daily with top stories in business, economics, and political news, as well as editorials and news on MERCOSUR. The subcategories of the business section guide users to news that is specific to an individual business topic.
Category: Regional News

Featured Academy

Doing Business in Brazil
The module on Brazil provides one with information on: the enormous potential for doing business here; cultural practices; tips, tools, and information about typical practices in daily business; the state of logistics and transportation; current political and social issues facing the country; and important business factors that directly affect costs of doing business, including the labor force and taxes. Included is also a case study on the Amazon rainforest.
Category: Doing Business In

Korean: Korean for Business and Economic
The Korean Internet Sourcebook has been developed to provide a single location for links to many Internet resources relevant to the study of Korean business and economics. Users will notice that all links are in the original Korean, which is intended not only to maintain integrity of the Korean language but also to encourage proper reading and recognition of Korean language as used in Korean business culture.
Category: Language Guides

globalEDGE Business Review

"The Lodging Market Potential Index (L-MPI©) Ranking of Major Lodging Markets in the United States"
by A.J. Singh, Raymond S. Schmidgall, and Tunga Kiyak (Volume 6, Number 1, pp. 1-5, 2012)

The Lodging Market Potential Index (L-MPI©) as a systematic and formal analysis was developed as a joint project between The School of Hospitality Business, MSUCIBER, and globalEDGE to identify aggregate market potential and ranking for major lodging markets in the USA in 2009. Faculty researchers from The School of Hospitality Business at Michigan State University presented the index at the Midwest Lodging Investors Summit (MLIS) in Chicago, in July 2011. This article presents the complete index (L-MPI©), which covers the 25 largest market areas (as tracked by Smith Travel Research) that show the long term potential of lodging investments.

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