Key words for 2013 global economy(3)

Abenomics

When Japan's new prime minister Shinzo Abe took office, he put forward three strategic measures in economic policy to revive Japan's economy. These are expansion of government spending to stimulate economic growth, implementation of positive monetary policy, and regulatory reform-dominated growth strategy. The aim is to control deflation which has been a major contributor to a long-term downturn. The measures have been termed 'Abenomics'.

In the first half of the year, driven by Abenomics, the Japanese economy saw high growth. The annualized GDP growth in the first two quarters was 4.1 percent and 3.8 percent respectively.

However, under the Abe fiscal stimulus, Japanese government debt in 2013 exceeded 1000 trillion yen, representing nearly 250 percent of GDP and ranking highest in the developed countries.

Furthermore, because the growth strategy of the third measure struggles to impact on deep-seated structural problems, there have been suggestions that Abeonomics are economic stimulus policies more in name than in reality.

In addition, whether Abe can handle the relationship between Japan and its Asian neighbors will be one of the main factors affecting the Japanese economy. If Japan's relations with China and South Korea remain taut, and mutual economic and trade relations deteriorate due to cooling political relationships, Japan's economic growth will be affected to some extent.

Bitcoin

Bitcoin is a virtual currency which is not supplied by a central bank. People obtain it by using a computer program to run a specific algorithm, commonly known as "mining". Bitcoins are regarded by many fans as electronic gold.

The value of the Bitcoin has appreciated nearly 100-fold this year. The price is vulnerable to manipulation by producers. In the course of a day it can just as easily rise by a factor of several times, or fall by half.

Due to the huge risks involved in investment, financial regulators from the Chinese mainland, Hong Kong, South Korea, and Europe all issued announcements towards the end of 2012, warning Bitcoin investors. Due to the tightening regulatory regime on the Chinese mainland, bitcoin prices halved in a matter of days.

Gold price falls sharply

Since early 2013, impacted by an expectation of a tightening in the supply of dollars, gold has gone through several rounds of significant price shocks, and an overall downward trend.

Close to the end of the year, the international gold price fell below 1,200 U.S. dollars an ounce, a new three-year low. It is also at its lowest year-end closing price since 2000.