Three Asian Tigers caught in a (Chinese) Typhoon

Hong Kong, Taiwan and Singapore are caught in an economic typhoon. Activity growth will be hindered by depressed external demand, especially from China (lower demand, economy's upgrading) and tighter financial conditions, including contagion risks. All three economies

will grow below +2% in 2016-17, far below their long-term average.

In the short run, resilient domestic demand will come from reactive policy-making and stimuli in the pipeline are

promising to safeguard growth. In the long run, each hub will have to diversify and reinvent its business model. Hong

Kong appears to be the least agile and the most affected by Chinese woes.

Taiwan has a strong innovation edge but

China becomes a stronger contender. Last, Singapore will benefit from past diversification and branding efforts

especially of its business environment and logistics.

In 2016, insolvencies will increase by +15% in both Singapore and Hong Kong, and by +17% in Taiwan.

Vulnerable sectors include basic materials (too low prices), retail and electronics (Chinese collateral damage), and housing and real estate (leverage)