China Economy

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China decrees consumption!

It’s official. China’s 12 Five Year Plan confirms that China has a two speed economy that makes Australia’s two speed economy look thoroughly normal. On one side of the two speed economy is the private sector, which is well documented in an overview by The Economist. Ninety per cent of China’s 43 million companies are private,

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Michael Pettis: China slowing

` 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

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Macquarie bursts the China bubble

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

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China’s balancing act

China’s crackdown on dissidents has intensified in recent weeks, a development that is starting to get some traction in the mainstream US media. In this weekend’s New York Times: BEIJING — Teng Biao is no stranger to the wrath of the Chinese authorities. One of a handful of lawyers in China pressing for human rights

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Canadian Business on China’s bubble economy

I read an interesting article today from Canadian Business magazine on the challenges facing the Chinese economy and the risks to commodity exporters like Australia and Canada (h/t Financial Insights).  It’s a worthwhile read, particularly for readers seeking a detailed overview of the bear case on China. But a warning – at 5,400 words the

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Pettis on China’s Five Year Plan to consume

Exclusively from Michael Pettis’ newsletter: It seems the weird period of money-market tightening seems to have abated, at least for now.  My SWS colleague Chen Long tells me the following: The PBoC has injected liquidity through open market operations for the 16th consecutive week. The central bank issued RMB 1 billion in 3-month bills and RMB

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China’s unasked questions

An awful lot of rubbish is written about China. Such as how China’s property market is overheating, or its exports unbalancing the world economy. So here are a few questions. When did private property ownership start in China? About a decade ago. Who owns most of the land? The Party (which of course gives them

3

Geopolitical risk: don’t forget China

Investors are nervously watching the situation in Libya unfold this week as fears grow that the unrest could spread to larger neighboring countries like Saudi Arabia, disrupting the supply of oil.  Oil rose above $100 a barrel in New York today, while one investment bank predicted that if Libya and Algeria alone were to halt

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Westpac warns on 2012 China bust

This superblog has not made an editorial decision to suddenly be kind to the banks. But credit where credit is due and Westpac joins CBA (praised by the Unconventional Economist today) in having produced an excellent piece of research (h/t The Lorax). This time on China. Indeed, this blogger will go so far as to say that

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Pettis on Chinese inflation

From Michael Pettis’ exclusive newsletter: Last week the National Bureau of Statistics released inflation data for the month of January: In January 2011, consumer price index rose by 4.9 percent over the same period of the previous year. Of which, urban area and rural area was up by 4.8 percent and 5.2 percent respectively; the price

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Pettis on Chinese liquidity

From Michael Pettis’ exclusive newsletter: Because of the lunar New Year festivities not a whole lot happened in China last week, not counting of course the never-ending stream of fireworks and the several really great jiao zi dinners I have managed to snag from my students and their families.  I have nonetheless been getting a lot

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Yuan gush

From Michael Pettis’s exclusive newsletter comes this update on Chinese lending and interest rates: It seems that already bankers might be anticipating the relaxation of lending targets.  Rumors on the ground suggest that new lending in January may come in as high as RMB 1.2 trillion.  This might seem pretty strong evidence that the PBoC

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The China domino

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

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China’s blunder

The ongoing demise of the Bretton Woods II (BWII) currency system and its implications for the balance of world growth has been a recurrent theme for this blog. And if recent commentary around China is any guide, the breakdown is accelerating toward another critical moment. To recount, this blogger wrote last year: BWII is the

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Guest post: Of China and guano

Following the La Niña-related floods in Queensland earlier this month food prices have spiked, adding to an already serious inflation crisis around the world and toppling the government of Tunisia. And while protesters in Tunis were hardly thinking of Queensland bananas or sugarcane as they mobbed the streets, the changing and dramatic climatic conditions that

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La Nina as Black Swan update

For those that missed it, Yves Smith of Naked Capitalism fame quoted liberally from our very own Flashman over the weekend, firing off a frenzy of activity. Amongst that traffic was a comment from Bruce Krasting that included an excellent link comparing this super La Nina with those of the past. He concludes: You are

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Different week, same story.

Another week, but the same stories everywhere. As we have spoken about many times before China has got itself into all sort of trouble with building and infrastructure projects going nowhere.   Chinese banks may struggle to recoup about 23 percent of the 7.7 trillion yuan ($1.1 trillion) they’ve lent to finance local government infrastructure