March 10, 2010
China Moves the World
It is an interesting irony that the same mainstream media that criticizes Chinese government data as untrustworthy claims that same data is capable of moving commodities, currency, and stock prices the world over. Consider today's headlines. Chinese numbers on exports and inflation are responsible we read for stock markets going up in the USA, Canada, and Brazil; affected the Mexican Peso, the (US) Dollar, and the Yen; and impacted gold and oil markets!....
Labels: exports, forex, gold, inflation, oil
January 27, 2010
China Year End 2009 Data Shows Strong Stable Growth
Remember how 2009 began (much like this new year) with predictions of a crash in China because Beijing had poor experience handling a recession and China couldn't possibly decouple from the global recession? Turns out the Chinese economy grew steadily and healthfully all 2009. Here are data points for last year: GDP expanded 8.7%; retail sales grew (in real terms) 16.9%, better than 2008; fixed asset investment grew 30.1% with urban fixed asset investment at 30.5%; capital expenditure investment in secondary & manufacturing industry expanded 26.8%; RMB 9.59 trillion (Yuan) in loans were issued, a 95% increase; exports were down -16% to $1.2 trillion (US dollars) and imports dropped -11.2% to $1 trillion; with exports down Chinese industrial output grew only 11%, the slowest since the 2001 recession; Beijing's foreign exchange reserves grew to $2.4 trillion; although food prices remain inflationary, overall CPI deflated to 0.7%....
Labels: economy, exports, foreign exchange, inflation, investment
November 19, 2009
Heating Up: Chinese Electric Rates Increase
Beijing's all-powerful National Reform and Development Commission has approved an increase in per kilowatt hour electric utility rates of 0.028 Yuan (approximately 4 cents US) or 5.7% for commercial customers. Residential rates will remain unchanged until January 2010 when they will increase on a new metric based on useage over average household rate - this will impact urban dwellers far more than rural users. China's big power transmitters - State Grid Corp., one of the largest companies in the world, and China Southern Power Grid Corp., have lost money all year due to the increased cost of coal. China like the USA relies principally on coal to generate base electricity demand....
Labels: electricity, inflation
June 29, 2009
Beijing Ups Gas, Diesel Price at Pump
The NDRC, Beijing's powerful economic regulator, will allow an 8-10% increases for gas and diesel retail prices helping China's big fuel distributors such as PetroChina but putting a squeeze on domestic drivers. The commission is testing how Chinese respond to paying (somewhat) close to world prices for automobile petrol.....
Labels: gas, inflation, peak oil
November 09, 2008
Beijing Announces Massive Stimulus Plan
Acting quicker and bigger than forecasters expected, China's State Council revealed Monday morning huge economic stimulus efforts valued upwards of half a trillion (US) dollars. The central government will spend several hundred billion Yuan on infrastructure building (railways and roads) immediately to be matched by Provinces and City spending on development including housing. Markets are responding positively this morning with Chinese stocks up and commodities markets -- including oil -- getting a boost as well.
Only China and the USA have the latitude to take on central government debt to build their way out of a depression. Will China's actions be followed in the next year or two by government spending in America?
Labels: inflation, panic of 2008
June 19, 2008
China Spoke, Oil Markets Listened
Beijing will allow key price increases in the energy sector giving oil and gas majors approval for close to 18% price hikes, the second double digit increase in less than a year. Fuel remains subsidized in China and undervalued to world markets.
The announcement brought down the spot price for a barrel of oil more than $4 today.
Electric utilities will also get a rate hike - something sought after before last Winter's devastating snow storms -- to increase kilowatt hour charges just under 5%.
Labels: china, chinese trade, gas, imports, inflation, markets, oil, prices
April 24, 2008
Beijing Fixes Shanghai Flat
After months of hints and vague promises, Beijing came to the rescueof Chinese shares in a surprise announcement last night on national TV that the duty on stock trading would be reduced to just one tenth of one percent, repealing last May's increase that aimed at curbing short term speculation and reducing volatility. Volatility however is here to stay given high inflation and commodities values.
Values shot up across all boards with the Shanghai Composite gaining over 9% to close at 3,583. Many observers had claimed3,600 as a sustainable level with current earnings andperformance. As always, I'll update the markets on each episode ofThe Sinomania! Show.
Labels: bubble, chinese stocks, index, inflation, shanghai composite, shares
May 10, 2007
Trade Winds or War?
The blame China crowd in the USA Congress has new strength now under Democratic Party leadership and a protectionist backlash against Chinese imports may be coming. At least that is the view of the oft-quoted Chief Economist for Morgan Stanley, Stephen Roach.
Sinomania! has been warning for years that if certain special interests and pandering politicians get their way, the siren call at the shopping mall will be "attention [insert major retailer here] shoppers -- all items at thrice the price!"
Rather than address the catastrophe that is the American educational system, the massive financial burden on businesses to pay for employee's health care needs (in the absence of a national health care system), along with all the other ills that plague America's economy, Congress prefers to find blame in the murky world of "foreign trade."
As Roach nices sums up: " Absolutely nothing is gained on either front by blaming China for problems such as these that originate at home. To the contrary, much could be lost – in the US, the global economy, and world financial markets – if Congress makes a major blunder on US trade policy. "
If this concerns you at all, watch the following politicians closely: in the Senate, Max Baucus, Charles Schumer, Lindsey Graham; in the House: just about any representative with manufacturing jobs and labor unions in his/her district.
Sinomania! has been warning for years that if certain special interests and pandering politicians get their way, the siren call at the shopping mall will be "attention [insert major retailer here] shoppers -- all items at thrice the price!"
Rather than address the catastrophe that is the American educational system, the massive financial burden on businesses to pay for employee's health care needs (in the absence of a national health care system), along with all the other ills that plague America's economy, Congress prefers to find blame in the murky world of "foreign trade."
As Roach nices sums up: " Absolutely nothing is gained on either front by blaming China for problems such as these that originate at home. To the contrary, much could be lost – in the US, the global economy, and world financial markets – if Congress makes a major blunder on US trade policy. "
If this concerns you at all, watch the following politicians closely: in the Senate, Max Baucus, Charles Schumer, Lindsey Graham; in the House: just about any representative with manufacturing jobs and labor unions in his/her district.
Labels: china, deficit, imports, inflation, trade, war
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