Ventures Dialogue

A positive economist might be an oxymoron, especially nowadays, but not according to Mark Mullins, Executive Director of the Fraser Institute, an international education and research organization.  Mullins was the keynote speaker at “Weathering Market Turmoil,” an event co-hosted by the Institute and the Hong Kong Canada Business Association.  Mullins gave an overview of world markets, starting 300 years ago in the 1700s all the way to today’s crisis.  While not saying that he can predict when the world’s economy will turn around, Mullins did note some areas of encouragement.  He highlighted that:

• Stock markets are cyclical by nature.
• Stock markets have shown signs of stabilizing since November.
• There is a need to watch for stock markets to hit bottom as they do so about four to six months before an upturn.
• Like the stock markets, interest rates have been volatile since late 2007, but are also leveling of and can be an indication of stability. Rates are still decreasing, but there is less “stress”, as he puts it.
• Interest rates and stock markets and linked and their stabilization are a positive sign.

His presentation was broken down into five main sections: lessons of history; market outlook; economic outlook; policy and politics; and implications for China.  For the latter, Mullins notes that China has promptly and aggressively taken steps to battle the financial crisis, which he believes lays a good foundation for future growth.  He also outlined from the Institute’s Economic Freedom of the World: 2008 Annual Report, the progress that China has made and needs to make, specifically in regards to their size of government, legal structure of property rights, access to sound money, freedom to trade, and regulation.

Photo by ArtemFinland