Category: China Economy
The analysis published under this category are as follows.
Wednesday, June 06, 2007
Looming Trade War - The China Syndrome / Economics / China Economy
By: Dr_William_R_Swagell
“The issue on the table is not whether the US needs to take action to respond to the interventionist policies of China and Japan in this key area, but what form that action should take.” Sander Levin, Chairman trade subcommittee House Ways & Means Committee.
“The time for talk has passed; we must act now to end this unfair trade practice that cripples American industries.” Charles Rangel, Chairman House Ways & Means Committee.
“…by going after China, you in the Congress are playing with fire… (risking) a policy blunder of monumental proportions…if the China bashers get their way.”
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Friday, June 01, 2007
China Diversifying Reserves into Equities and into Gold? / Commodities / China Economy
By: Julian_DW_Phillips
Last year the Chinese government decided to change its policy on the composition of its reserves to reflect the composition of its trading partners. This was an effort to hold currencies sufficient to cover 'rainy days' with these partners. But as reserves are at levels way above those needed for a 'rainy day', the Chinese government finds itself holding well over a $ trillion more than it needs and this amount is rising by $250 billion a year and sure to rise.Read full article... Read full article...
Thursday, May 24, 2007
China, U.S.: The Strategic Economic Dialogue as a Tool for Managing Relations / Politics / China Economy
By: John_Mauldin
As the forth largest economy in the world, the rapid growth of Communist China' military, and economic prominence has both perplexed and intrigued the United States. Stratfor analyst Rodger Baker addresses the two primary economic concerns troubling Washington and Wall Street alike: the Chinese-U.S. trade imbalance, and the floatation of the renminbi, currently pegged at 7.8 Yuan to the dollar, though allowed to fluctuate 2-3%.Washington has identified the currency dilemma as the primary obstacle to improved U.S.- Chinese relations, concluding that the removal of the currency peg will not only permit U.S. exports to be more competitive but also shrink the current trade imbalance.
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Thursday, May 24, 2007
Paulson’s Kabuki: Integrating China into the Neoliberal System / Politics / China Economy
By: Mike_Whitney
Treasury Secretary Henry Paulson is a man who knows what he wants. And what he wants is to further integrate the Chinese market into the global system — the “American-run” system.To achieve that goal he has assembled a group of 10 cabinet-level officials—mostly from big-business – who will are expected to urge the Chinese delegation to implement "sweeping economic reforms" that will open up their market to U.S. investment.
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Tuesday, May 22, 2007
Hyperinflation in China, 1937 - 1949 / Economics / China Economy
By: Mike_Hewitt
Till 1927, China had a free banking system through the interaction of private banks operating in various regions of the country. Privately held banks operated like any other Chinese business and competed with one another to obtain customers. Most banks issued their own notes which were redeemable in silver, the traditional medium of exchange in China. The notes from each bank circulated freely with the notes from other banks.
These Chinese banks operated largely without state regulation. A free banking system has inherent checks against inflation - primarily because customers will flee from depreciating currencies - and instances of banks' inflating their currencies were rare.
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Saturday, May 19, 2007
People's Bank of China Takes With One Hand, Gives With The Other? / Interest-Rates / China Economy
By: Paul_L_Kasriel
The People's Bank of China (PBOC) announced today that it was raising the required reserve ratio on its constituent banks by 0.5 percentage points to 11.5%. This would be the eighth increase in the required reserve ratio since June 2006 when the ratio was 7.5%. You would think that with the PBOC mandating that banks now hold more reserves, the cost of reserve credit would be moving up. Think again. Chart 1 shows that the Chinese overnight interbank interest rate, the equivalent of the U.S. fed funds rate, stood at 1.57% in March (latest data that I have available) - 12 basis points lower than where it was in June 2006, before the required reserve ratio started its ascent.Read full article... Read full article...
Friday, May 18, 2007
Dirty Clothes are Big Business, Whirlpool and Mastercard / Companies / China Economy
By: Michael_K_Dawson
Long regarded as the world's growth engine the U.S. economy is currently experiencing a rough patch. This was highlighted by first quarter GDP of 1.3% down from an annualized rate of 2.5% in fourth quarter 2006. Anticipating the slow down, Wall Street analysts lowered first quarter S&P 500 earnings from 8.7% in January to 3.3% by the first of April. However, after all is said and done it appears as though Wall Street's concerns were for naught. Earnings will be closer to 9%, better than the historic average. How could this be?Read full article... Read full article...
Wednesday, April 25, 2007
Is China's Economy Too Hot? / Economics / China Economy
By: Michael_K_Dawson
I am sure many were concerned on April 19th as it appeared that the markets were in for a repeat of the China led melt-down on February 27. The Chinese Stock Market's negative take on the countries 11.1% first quarter growth rate spilled over to Europe and cast a black cloud over the U.S. Markets as it opened. The surge in growth rate coupled with a higher than acceptable consumer price index and a 23.7% growth in fixed-asset investment prompted statements such as the following from the government:
“If this type of fast growth continues, there is the possibility of shifting from fast growth to overheating. There is that risk,” Li Xiaochao, spokesman for the National Bureau of Statistics, told a news conference.
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Tuesday, April 24, 2007
Whats behind the Euphoria in Asian Stock Markets and Gold? / Stock-Markets / China Economy
By: Gary_Dorsch
For a few tumultuous hours on April 19th, it seemed like deja ‘vu all over again. Global commodity and stock market operators held their collective breathe, as the Shanghai Stock Index tumbled as much as 7.2% to the 3,400 level, reviving fears of yet another gut wrenching global shake-out. Beijing had delayed the release of two key economic statistics until after the close of trading, heightening fears of bearish news that could derail the Shanghai freight train.
After the close of trading, Beijing said consumer inflation had hit 3.3% in March, its highest in more than two years, and far above 2.7% in February. China's economy is overheating, expanding at an 11.1% annualized clip in Q'1, and factory output is 18.5% higher from a year ago. The news of above target inflation, jolted China's 5-year bond yields upward by 50 basis points to 5.25%, to its highest in two years, on fears the People's Bank of China (PBoC) might actually tighten liquidity.
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Tuesday, April 24, 2007
The Conundrum that is China / Economics / China Economy
By: Paul_Petillo
There are currently two undeniable truths in this new global marketplace: The US will buy what it wants with borrowed money and the Chinese have so far enabled that buying spree by loaning us the cash.
China has become an economic enigma. Growth in the country is running over 11% and inflation, now at 3.3%, slightly over what China considers reasonable, is beginning to increase much to the dismay of the Communist government.
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Tuesday, April 17, 2007
The US Dollar and Chinas Impending Recession, Part I / Economics / China Economy
By: Gerard_Jackson
There is a great deal of hot air being blown about -- particularly from that pack of economic illiterates commonly called politicians, especially Democrats. Their line is simple and to the point: China has manipulated the exchange rate so as to artificially lower the price of her manufactures at the expense of American industry. In other words, hapless Chinese taxpayers are being forced to subsidise American consumers. (Complaints about this alleged policy are particularly rich coming from Democrats: the people who made careers out of offering free lunches to the American public).
It is true that something bad is going on in the Chinese economy, but it is not subsidised exports. China is undergoing a massive inflation-led boom that can only result in severe distress. Let us look at some statistics, the sort our economic commentariat ignore. The latest monetary aggregates show that M2 increased by "16.9 per cent year on year in 2006". (M2 consists of currency and deposits).
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