China Economy

From Andrew Collier of Orient Capital Research via BeyondBrics: Some of the excess construction in Sichuan’s rural areas can be laid at the feet of disgraced former Chongqing Party Secretary, Bo Xilai, who was removed from office under a cloud in 2012.

Chinese August data was out over the weekend and continued to weaken.

From Daiwa Securities: The sense of surplus in China’s supply capacity has been indicated previously. This produces the risk of a large-scale capital stock adjustment occurring in the future. Chart 6 shows long-term change in China’s capital coefficient (= real capital stock / real GDP).

Cross posted from Investing in Chinese Stocks While the consumer was hit by the Porkpocalypse in August, factories saw prices fall again for the worst two-month result since the start of the year.

by Chris Becker Long iron ore stock holders are salivating at the prospect of another epic GFC style stimulus package from their capitalist cousins in the Middle Kingdom as another flood of Yuan hits asset markets.

by Chris Becker A little later than expected (maybe held a bit to “tweak” the official figures) but just after lunch, the Chinese August trade balance figures were posted.

by Chris Becker There is a yin and yang to the markets, literally.

Cross posted from Investing in Chinese Stocks A lot of finance minister and financial media are confused by a bureaucrat who speaks plainly.

Cross posted from Investing in Chinese Stocks Up until this point, outflows have mainly been driven by wealthy people moving assets out of China and into overseas real estate and investments.

by Chris Becker The hits keep coming for those wedded to a strong China forever.

Cross posted from Investing in Chinese Stocks However, the hustle and bustle comes to an end, like a Golden Age carnival gorgeous ended.

From Willem Buiter, one of the world’s most sensible market economists via Bloomie: “It’s an economy that’s sliding into recession.” Premier Li Keqiang is seeking to defend a 7 percent economic growth goal at a time when concern over slowing demand in China is fueling volatility in global markets.

From the Mad One today: From the government perspective, why would they pull out the big guns?

From Bloomberg: The People’s Bank of China has been offloading dollars and buying yuan to support the exchange rate, a policy that’s contributed to a $315 billion drop in its foreign-exchange reserves over the last 12 months.

From Forexlive, it’s back on: People’s Bank of China (PBOC) sets the USD/CNY mid-point reference rate at 6.4085 The bank sets the mid-point each day (Monday to Friday) and then allows the rate to fluctuate +/-2% either side of this central point.

Lots of good stuff from FTAlphaville on the Shanghai bust today starting with Goldman: Yes, it’s a major bust.

From Westpac: The Chinese economy remains a major source of concern for global investors.

From Reuters comes an ‘uh oh’ moment for the Aussie property, via Reuters: China said it would launch a three-month crackdown on underground banking to curb money-laundering and illegal funds transfers as unstable markets stoke fears of capital flight.