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HenryTo
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rffrydr
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 Posted: Tue Dec 29, 2009 3:18 pm Post subject: |
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China’s crisis
Published: December 27 2009 18:00 | Last updated: December 27 2009 18:00
| Quote: | China’s momentous year can be divided in two. In the first half, as developed markets floundered, it was the saviour of the world: conciliatory and deferential, reigniting linked economies through the awesome power of government stimulus. In the second, as bigger nations recovered some swagger, it grew xxx and more inward-looking.
Having set in motion a credit and investment-fuelled recovery to manufacture strong growth in the 60th anniversary year of the People’s Republic, China is beginning to face the consequences.
No figure embodied that significant shift more than Zhou Xiaochuan, governor of the People’s Bank, and the first of Lex’s Chinese personalities of 2009. In March, he called time on the dollar as the main global reserve currency, but in the nicest possible way. Not only was it an indirect rebuke for the US’s rising fiscal and current account deficits, but Mr Zhou’s solution – a new super-sovereign currency, under the auspices of the International Monetary Fund – steered clear of overt nationalism.
By November, however, Mr Zhou was resolutely ignoring calls for a stronger renminbi, telling a G20 gathering that pressure to appreciate was “not that big”. (The G20 begged to differ.)
The governor’s task in 2010 looks formidable.
A continuation of “moderately loose” monetary policy, as promised by December’s economic work conference, seems likely to drive consumer price inflation well above the government’s 3 per cent forecast for next year. Consumer price inflation jumped from minus 0.5 per cent in October, year on year, to a positive 0.6 per cent last month. On a month-on-month annualised basis, the national property price index rose by 14 per cent. That could put 61-year-old Mr Zhou – a cerebral protégé of former president Jiang Zemin’s Shanghai clique – on a collision course with President Hu Jintao’s more dovish Youth Leaguers. Even so, a big revision of policy settings could come sooner than expected. |
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rffrydr
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| Posted: Sun Dec 27, 2009 12:58 pm Post subject: |
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HenryTo
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| Posted: Sun Dec 27, 2009 1:05 am Post subject: |
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China set to tighten in 2010. China is the place to watch for those thinking about a position in commodities (with the exception of natural gas) and global equities next year:
| Quote: | http://www.business24-7.ae/Articles/2009/12/Pages/26122009/12272009_f8696df51792429e89b77609f366fb5d.aspx
Put simply, that implies China may take steps to limit the amount of money banks are allowed to lend and to drive the margins between what they pay in interest and what they charge higher, both steps which will cool growth and speculation.
China's central bank on Wednesday followed up by promising to exercise tighter control over bank lending next year while reaffirming a long-standing pledge to maintain "appropriately loose" monetary policy.
Even if you don't own a million dollar apartment investment in Shanghai – kept empty of course because cash flows are for the little people -–this could spell trouble. Zhou "today signalled the end of the global market bounce that has been in progress since the end of last winter," Lombard Street Research economist Charles Dumas wrote in a note to clients.
"The only major addition of liquidity in the world economy over the past year has been in China. That is about to be withdrawn. Risk assets look like an unwise place to be in early 2010, especially commodity futures and the government bonds of countries with large deficits and/or debts. For risky investments worldwide, this could mark a turning point from 2009's massive rally." |
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rffrydr
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HenryTo
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HenryTo
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HenryTo
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chestnutstime
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| Posted: Wed Dec 17, 2008 7:20 pm Post subject: |
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I don't know where to put this thread properly. If it's in a wrong place, please move it to where it belongs. Thanks in advance.
----------------------
Please run your Windows Update immediately to have your IE updated so that hackers won't be able to steal your crucial info from your computers.
http://blog.wired.com/business/2008/12/microsoft-to-ru.html
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rffrydr
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rffrydr
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| Posted: Mon Nov 10, 2008 8:19 am Post subject: |
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| Quote: | Markets cheer China
Published: November 10 2008 09:21 | Last updated: November 10 2008 11:21
Markets roared their approval to China’s stimulus package on Monday. The local stock market surged over 7 per cent, London mining companies followed, the Aussie dollar jumped while the risk-averse yen slipped, and base metals were off to the races – nickel was up 11 per cent and copper 8 per cent.
The reaction doubtless delighted Beijing policymakers, particularly when recalling the limp response in New York to some of US treasurer Hank Paulson’s cheques. And, at face value, there is room for cheer. The country responsible for a good slug of global economic growth is spending just shy of $600bn, or a fifth of GDP, to keep its engines firing. It will build more railways, airports and houses, putting laid-off factory and construction labourers back to work and ensuring continued demand for all manner of commodities.
But some perspective is necessary. For starters, the headline number includes plans already on the table. Some projects will simply be accelerated, and most economists reckon that at best half the spending relates to completely new projects. Secondly, there will be a gap – possibly stretching into the second quarter of 2009 – before construction spending kicks in. With factories disgorging workers almost daily, some temporary unemployment at least looks unavoidable. Some of the spending is also to come from provincial governments, whose budgets are no longer swollen by sales of land at frothy prices and which may thus be obliged to raise debt.
Moreover, the package sees the government returning to centre-stage. There are no personal tax cuts to whip up private consumption, although the government is giving tax breaks to companies that upgrade their technology. In short, state-directed lending is back. All else being equal, China’s stimulus package should be sufficient to absorb the newly unemployed and keep growth above 6 per cent. But don’t count on it saving the rest of the world too. |
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rffrydr
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| Posted: Sun Nov 09, 2008 8:44 pm Post subject: |
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Problem with those infrastructure initatives is the enourmous time lag before they really get goin'. But this is China's forte. CAT will be interesting. And the projects are qualitatively different from japan's. Hope we can say the same here. The "smart grid" looks like a good start however.
I'll be watching the grains tomorrow. Looks like the toy industry spilling its guts was the spark to begin to stabilize the countryside and put a brake on urbanization. When times get uncertain watch for the chinese to invest in known values--food.
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HenryTo
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| Posted: Sun Nov 09, 2008 7:51 pm Post subject: |
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China's "10 major steps" to combat its and the global slowing economy:
http://news.xinhuanet.com/english/2008-11/09/content_10332422.htm
| Quote: | | China will take 10 major steps to stimulate domestic consumption and growth as it turns to an "active" fiscal policy and "moderately easy" monetary policy, an executive meeting of the State Council said on Sunday. |
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rffrydr
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HenryTo
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