Archives of “china” tag

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Christine Lagarde: "China's Slowdown Was Predictable, Predicted"… Yes, By Everyone Except The IMF

  
Analysis, Education
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In what may be the funniest bit of economic humor uttered today, funnier even than the deep pontifications at Jackson Hole (where moments ago Stanley Fischer admitted that “research is needed for a better inflation indicator” which means that just months after double seasonally adjusted GDP, here comes double seasonally adjusted inflation), in an interview with Swiss newspaper Le Temps (in which among other things the fake-bronzed IMF head finally folded and said a mere debt maturity extension for Greece should suffice, ending its calls for a major debt haircut), took some time to discuss China.

This is what she said. 

Turning to China, Lagarde said she expected the country’s economic growth rate to remain close to previous estimates even if some sort of slowdown was inevitable after its rapid expansion.
China devalued its yuan currency this month after exports tumbled in July, spooking global markets worried that a main driver of growth was running out of steam.
“We expect that China will have a growth rate of 6.8 percent. It may be a little less.” The IMF did not believe growth would fall to 4 or 4.5 percent, as some foresaw.

Actually, some – such as Evercore ISI – currently foresee China’s GDP to be negative, at about -1.1%. (more…)

George Soros Warns Washington To "Mend Relations With China" Or Face World War 3

  
Analysis, Education
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A Partnership with China to Avoid World War (via The New York Review of Books)

International cooperation is in decline both in the political and financial spheres. The UN has failed to address any of the major conflicts since the end of the cold war; the 2009 Copenhagen Climate Change Conference left a sour aftertaste; the World Trade Organization hasn’t concluded a major trade round since 1994. The International Monetary Fund’s legitimacy is increasingly questioned because of its outdated governance, and the G20, which emerged during the financial crisis of 2008 as a potentially powerful instrument of international cooperation, seems to have lost its way. In all areas, national, sectarian, business, and other special interests take precedence over the common interest. This trend has now reached a point where instead of a global order we have to speak of global disorder.

In the political sphere local conflicts fester and multiply. Taken individually these conflicts could possibly be solved but they tend to be interconnected and the losers in one conflict tend to become the spoilers in others. For instance, the Syrian crisis deteriorated when Putin’s Russia and the Iranian government came to Bashar al-Assad’s rescue, each for its own reasons. Saudi Arabia provided the seed money for ISIS and Iran instigated the Houthi rebellion in Yemen to retaliate against Saudi Arabia. Bibi Netanyahu tried to turn the US Congress against the nuclear treaty the US was negotiating with Iran. There are just too many conflicts for international public opinion to exert a positive influence.

In the financial sphere the Bretton Woods institutions—the IMF and the World Bank—have lost their monopoly position. Under Chinese leadership, a parallel set of institutions is emerging. Will they be in conflict or will they find a way to cooperate? Since the financial and the political spheres are also interconnected, the future course of history will greatly depend on how China tackles its economic transition from investment and export-led growth to greater dependence on domestic demand, and how the US reacts to it. A strategic partnership between the US and China could prevent the evolution of two power blocks that may be drawn into military conflict. (more…)

China Announces Huge Trade Deficit

  
  Education
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China announced on Saturday the first trade deficit within the last six years. Although a deficit was expected, nobody anticipated the numbers would reach $7.24 billion.

The last trade deficit in the country came in April of 2004 and was $2.26 billion.

For the month of March, the country’s imports totaled $119.35 billion and exports reached $112.11 billion. Both of these numbers are up drastically in comparison to March of 2009.

The deficit will more than likely turn around within the near future, but the numbers are enough to spark concern in the eyes of the Chinese.

The deficit in March mainly came from China’s trade with Taiwan, Japan and South Korea, Customs said, while it continued to run surpluses with the U.S. and the European Union. Those big trading partners have been among those arguing that China’s practice of keeping the yuan effectively pegged to the U.S. dollar gives its exporters an unfair advantage and contribute to the large trade surpluses.

All of this comes at a time when the United States and leaders throughout Europe are pushing China to increase the value of the yuan, which economist suspect is nearly 40% undervalued.

Latest Jim Rogers video interview on Bloomberg

  
Analysis, Education, Video
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Jim Rogers, chairman of Rogers Holdings, talks with Bloomberg’s Haslinda Amin about China’s yuan policy and calls for the mainland to allow the currency to appreciate. Speaking from Singapore, Rogers also discusses the outlook for global economies, currencies and the commodities market. Bloomberg’s Paul Gordon and Patricia Lui also speak.

The Dragon bubble

  
Analysis, Education
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something to remember as you hear this idiocy about China being the most powerful country on earth…

chinadragonChina is still a poor country. Notwithstanding the complexities of measurement, income per head, according to the World Bank, is roughly $3,000, a little less than Jordan and Tunisia.

In the extreme scenario in which US income per head remains the same forever more, and China’s income per head grows by a constant 8 per cent a year, convergence would happen in 2045. But this is silly maths.

The US will not stand still and China’s economic path is likely to be punctured sooner or later by a credit or asset crisis.

Further, it cannot grow by 8 per cent a year for that much longer, not least for demographic reasons. China is the fastest-ageing nation on Earth, with an age structure rather like that of Germany.

Its labour force will begin to decline in 2010 or so and fall every year for the foreseeable future. For a while, the transfer of the 80 million rural migrant pool to higher-productivity urban jobs will mask much of this impact, but only for a few years. (more…)

Marc Faber :Chinese economy will crash

  
Analysis, Economy, Education
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“It does not make sense for China to build more empty buildings and add to capacities in industries where you already have overcapacity. I think the Chinese economy will decelerate very substantially in 2010 and could even crash.”

in www.nzherald.co.nz

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