Belgium Archives - the patient investor

From Benn Steil & Dinah Walker:

As for bond prices, China’s central bank holds the key.After more than three years of steady appreciation, the RMB has declined over 3% this year – erasing the past year’s rise. Driven by the Chinese government’s desire to re-juice failing economic growth, RMB depreciation has naturally been accompanied by an increase in China’s foreign exchange reserves.China usually allocates about 40 percent of its foreign exchange reserves to Treasuries; so far this year, however, its official holdings of Treasuries have actually declined. What explains this? Given that China comes under pressure from the U.S. Treasury and Congress whenever it appears to be pushing down its currency, China is almost certainly disguising its Treasury purchases by holding them in Belgium.

Belgium scores highly on international productivity rankings, which compare GDP (converted to USD after adjusting for purchasing power parity) to hours worked by the workforce. But results can be deceiving. Amcham Belgium writes:

Although Belgium has a high productivity score, it might not be all good news. Firstly, the results could be influenced by the fact that only 34.5% of its employable population aged 55 to 65 are actually working ……… Secondly, Belgian salaries are on average 11% higher than those of neighboring countries (the Netherlands, Germany and France)…..

Belgium may rank high on GDP per hour worked but slips down the rankings when measured on GDP per capita because of its low labor participation rate which imposes a high social cost on the country. That is why it is important not to use just one measure when assessing productivity.
Read more at Belgium ranked as the 3rd most productive country in the world.

Tag: Belgium

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Belgium ranked as the 3rd most productive country in the world?