Post Tagged with: "China"
China: First the credit writedowns, but then what?
The immediate problem is the excess capital investment and the costly maintenance of the projects it has spawned. Longer-term, Asia’s growth prospects look good
Trade and the RMB
What is driving the increase in the RMB-denominated trade is probably not any preference to transact in RMB but rather speculative demand for RMB. That sounds pretty plausible
Here’s why Jim Rogers is bullish on Asia
Jim Rogers is bullish on Asia. In a twenty-minute interview with the BBC, he explains why? Hat tip Paul Kedrosky. Like Paul, “I find many of his rhetorical tricks maddening” but it is an informative interview nonetheless. Videos below
Looking for debt
An unsustainable rise in debt is, for me, one of the key indicators that the investment-driven model has passed its useful life and is generating negative growth while posting positive growth numbers. This is why I spend so much time trying to understand debt levels and the structure of balance sheets
Jim Chanos on China: ‘The Cracks are Spreading’
Jim Chanos sees a slowdown in residential property sales coupled with declining prices. Real estate companies are starting to close down. He argued on CNBC yesterday that this means the first signs of a Chinese slowdown are showing. Video below
Commodity Prices and Paradigm Shifts
People who are staring at a tsunami of demand for commodities from the developing world and predicting a doomsday of $400 oil and $4000 gold are missing the longer-term retreating tide of demand as citizens of the developed world actually demand decreasing amounts of energy, large goods, and heavy infrastructure. We won’t be packing up and moving to Mars, as the science fiction solutions to resource depletion propose. We will pack up and move into the virtual world
More on the China-bearish ‘factor mobilisation story’
There is a difference between economic growth from mere factor mobilisation and economic growth from increased productivity. One requires a lot more capital investment and debt than the other. If and when capital investment growth slows, expect a lot of losses and then we will have to see how these losses get socialised and whether policy makers double down on the capital investment story
China: rebalancing through wage increases
Is China currently rebalancing? The currency has been appreciating, the PBoC has hiked interest rates four times, and wages have been surging. Because of all of this I am often asked if China has finally begun the long-waited rebalancing process and whether we have yet seen an improvement in the underlying economy caused by a rising consumption share. Those who were hoping the answer was yes will have been disappointed by the release Thursday of the World Bank’s China Quarterly Update – April
China losing competitiveness
As labour costs in China rise, economists are beginning to think about replacing labour with capital, something we have already seen as a major factor in suppressing wage gains in developed economies. This is also in line with what economists say developing nations need to do to counteract the problem. More importantly, developing economies that reach this juncture must move up the industrial ladder to production of higher value-added goods or they will see their export competitiveness severely eroded
Speculators at risk as IEA confirms demand destruction has set in
A fall in commodity prices increases the potential for financial market disruption and non-performing loan problems in China
Chinese Financial Review: Onshore and Offshore
Almost a week before S&P’s move, Fitch cut the outlook for China’s yuan debt to negative from stable. Media coverage was almost non-existent and there has hardly been any commentary. Frankly, most observers don’t even seem to know it took place
Is it time for the US to disengage the world from the dollar?
Michael Pettis argues that Reserve currency status is a global public good that comes with a cost, and people often forget that cost