The World Bank has damned the lifeboats in its China Quarterly Update and called out multiple risks including a housing bubble, inflation and external imbalances. Here is the money excerpt: Inflation is unlikely to escalate but there are risks. Food price increases seem to have slowed for now, sequentially, and the (yoy) rate of increase in
From Michael Pettis this week: On Friday last week the National Bureau of Statistics released the eagerly anticipated first quarter data. As has been widely reported, first quarter GDP was up 9.7% year on year. CPI inflation 5.4% in March, a 32-month high, and up from 4.9% for the first two months of this year. For the first
As you can probably tell we are all having a bit of a break over Easter. But just while I have a bit of time before the Easter Bunny arrives and my yard apes turn into sugar crazed lunatics I thought I would share a few stories I am watching. China Protests Over the last
Earlier this month, Houses and Holes posted a report from Professor Nouriel Roubini warning that the Chinese economy is overheating and risks a sharp slowdown sometime after 2013. Now Professor Roubini has followed up with an article on Project Syndicate fleshing-out his views in greater detail. Professor Roubini more or less supports earlier warnings from Michael Pettis and prominent China
Here’s a heads up about the important Chinese data that is out around lunchtime today. Amongst the raft of data to be released is the GDP data. Chinese growth is increasingly important to everyone on the planet as our beloved Central Bank Governor pointed out in New York two nights ago. The chart below shows the
Just in, credit rating agency, Moody’s Investor Services, has downgraded China’s property sector to negative from stable, citing both falling property sales and prices [my emphasis]: Hong Kong, April 14, 2011 — In a new report, Moody’s Investors Service changes its outlook for the China property sector to negative from stable. The change reflects the
On new years day of this year the Chinese government announced that it had a new plan for housing China’s central government will strengthen its campaign to control soaring housing prices in 2011, a senior official said on Wednesday. Minister of Housing and Urban-Rural Development Jiang Weixin told a national work conference that the government will
Andy Xie, an independent economist based in Shanghai and the former Morgan Stanley chief Asia-Pacific economist, yesterday published an excellent article in Caixin warning that an inefficient public sector and negative real interest rates are pushing China towards stagflation, instability and a possible financial crisis (h/t interest.co.nz). Xie’s article more or less supports earlier warnings
Below find the executive summary of a new report into China’s housing bubble from The Economist Intelligence Unit. It has some terrific stats and is well worth your time, even though its analysis and conclusion add up to the intensely suspicious conclusion that ‘this time it’s different’. One particular claim I’ll take umbrage with is
From Nouriel Roubini at RGE Monitor: I’m writing on the heels of two trips to China during which I met with senior policy makers, bank executives and academics, just as the government launched its 12th Five-Year Plan, intended to rebalance the long-term growth model. My meetings deepened my own impression and RGE’s long-standing house view of
Analyst presentations can be tedious affairs, often an equal mix of the obvious and the dubious. But one I saw about China’s Five Year Plan’s implications of Australia really had me listening closely. The visiting China-based analyst was showing a slide of the projections of the growth in “low carbon” energy out to 2015. It
At last, a good news story on China. Readers might remember that I posted an article in December showing alarming satellite photos of entire cities laying vacant (see China’s empty cities). In that article appeared the below photo of Zhengzhou New District, which was supposedly “China’s biggest ghost city, complete with entire blocks of totally
` Exclusively from Michael Pettis newsletter: Quite a few numbers came out this week, but none of them were especially dramatic or likely to change anyone’s mind about anything. The most interesting thing to me is that there are indications that, once again, the economy may be slowing quickly. Every time Beijing gets worried about too
The pressure is growing for China to open up its capital markets as a way to solve its internal bubbles. The question is: how will that affect the rest of the world? The greatest impact of China – its massive scale – is so far largely confined to trade and global production chains. What happens if
The stated goal of the Hu Jintao-led Chinese government is a “harmonious society”. Perhaps that is why the word “Egypt” was blocked on certain search engines over the weekend. Multiple factors are in play in Egypt, but there is one vital similarity with China: Food inflation of a breadth and severity that few in the
