China Economy

Mac Bank has an interesting not out this morning that helps explain the current unseasonable strength in iron ore prices.

Cross-posted from Kate Mackenzie at FTAlphaville.

The July Chinese services PMI is out and continued its recent insipid performance: Latest data signalled a further increase in business activity in China’s service sector.

Cross-posted from Kate Mackenzie at FTAlphaville.

By Leith van Onselen Following on from his stellar effort in July, where he nicely articulated the huge structural imbalances plaguing the Chinese economy and the significant downside risks that such imbalances entail, Bill Smead, CEO & CIO at Smead Capita Management, returned to CNBC today to discuss his outlook for the Chinese economy.

China’s official PMI for July is out and cams in at 50.3, not flash, but better than the 49.7 consensus and so the dollar jumped half a cent.

Cross-posted from Kate Mackenzie at FTAlphaville.

Over the weekend we saw two new data points in China.

By Leith van Onselen Further signs have emerged that China’s authorities are serious about rebalancing the economy away from excessive production and investment, with the Ministry of Industry and Information Technology releasing a statement ordering more than 1,400 companies in 19 industries to cut excess production capacity this year.

Is Australia’s Red Knight riding to the rescue again?

The China Flash PMI for July is out and there ain’t no good news here, falling another 0.5 points to a one year low of 47.7: And, it’s all getting worse at a good clip as well: Rebalancing or bust!

It’s a real confusion of voices emanating from China.

From Bloomberg: Premier Li Keqiang’s government sees 7 percent growth as the bottom line for tolerance of an economic slowdown, Chinese news organizations reported, signaling the nation will act to support expansion if needed.

Cross-posted from Kate Mackenzie and David Keohane at FTAlphaville.

Cross-posted from Kate Mackenzie at FTAlphaville. Deutsche Banks’ China economics analysts are pondering why their forecast for 8.5 per cent growth next year is well above consensus (and even well above the IMF’s 7.7 per cent and the World Bank’s 8 per cent).

Find a new note from Damian Klassen of Wilson HTM nicely summarising the challenge of Chinese rebalancing.

From the ANZ: The People’s Bank of China (PBOC) announced new measures to further liberalize interest rates, effective from 20 July 2013.

From China’s Finance Minister Lou Jiwei last night: “From a policy perspective, China won’t roll out large-scale fiscal stimulus policies this year,” said Lou, who became finance minister in March.

From the MNI: BEIJING (MNI) – Chinese house prices rose at their fastest pace in three years in June as buyers continued to pour in off the sidelines, convinced that a government crackdown on market speculation lacks bite.

By Leith van Onselen Ordos in inner Mongolia has regularly been cited as the quintessential example of China’s unsustainable construction-led economy.

Cross-posted from Kate Mackenzie at FTAlphaville. It’s clear to everyone that something big is happening in China. Double-digit growth is long forgotten and even high single-digit growth is above the consensus (for whatever that’s worth).

By Leith van Onselen Above is another interesting interview aired last night on CNBC with Jim Chanos, founder and president of New York investment company Kynikos Associates, explaining why he believes investors are “misled by Chinese GDP numbers”, the “end of the commodity supercycle”, and how “China is a great place to be short”.

From Xinhua: Chinese Premier Li Keqiang said Tuesday that macroeconomic policies should be more scientific, forward-looking and targeted to promote continuous and healthy growth in the long run.