News Home
Home - Index -
News - Krisen 1992 - EMU - Cataclysm -
Wall Street Bubbles - Huspriser
Dollarn - Biggles - HSB - Löntagarfonder
- Skuldkrisen -
webtips -
Links - Contact
China
Premier Wen Jiabao calls China’s economic growth path “unbalanced, uncoordinated, and unsustainable.”
Bloomberg March 4 2010
Wen, 67, will give what amounts to China’s State of the Union speech tomorrow to the National People’s Congress in Beijing.
Wen says China’s growth model - emphasizing investment, manufacturing and exports over consumption - is creating economic distortions.
He told an online audience on Feb. 27 that 2010 would be “the most complicated year for the country’s economy” as the government sought to control property prices and inflation stoked by $1.4 trillion in new lending last year.
China’s property-market data may be masking the degree that
speculation is driving prices in some of the larger cities
Bloomberg Jan. 25 2010
China property sales also jumped 75.5 percent to 4.4 trillion yuan last year, led by the eastern cities of Zhejiang and Shanghai. The boom follows an unprecedented 9.59 trillion yuan of new loans being extended last year, flooding the economy with cash.
China: 'Dubai times 1,000'?
James S Chanos
THE NEW YORK TIMES and Todayonline Jan 08, 2010
Now Mr Chanos, America's pre-eminent short-seller, is working to bust the myth of the biggest conglomerate of all: China Inc.
As most of the world bets on China to help lift the global economy out of recession, he claimed that that China's hyperstimulated economy is headed for a crash.
"I find it interesting that people who couldn't spell China 10 years ago are now experts on China," said Mr Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. "China is not in a bubble." THE NEW YORK TIMES
“Bubbles are best identified by credit excesses, not valuation excesses,” Chanos said in a recent appearance on CNBC.
“And there’s no bigger credit excess than in China.”
He is planning a speech later this month at the University of Oxford to drive home his point.
Having accumulated $2,273bn in foreign currency reserves, China has kept its exchange rate down, to a degree unmatched in world economic history.
China has, as a result, distorted its own economy and that of the rest of the world.
Martin Wolf, FT December 8 2009
China Signals That It May Allow Currency to Rise Against Dollar
CNBC/Reuters, 11 Nov 2009
China sent its clearest signal yet that it was ready to allow yuan appreciation after an 18-month hiatus, saying on Wednesday it would consider major currencies, not just the dollar, in guiding the exchange rate.
In its third-quarter monetary policy report, the People's Bank of China departed from well-worn language on keeping the yuan "basically stable at a reasonable and balanced level." It hinted instead at a shift from an effective dollar peg that has been in place since the middle of last year.
"Following the principles of initiative, controllability and gradualism, with reference to international capital flows and changes in major currencies, we will improve the yuan exchange-rate formation mechanism," the central bank said in a 46-page monetary policy report.China’s central bank warned that its counterparts in developed nations face difficult choices
as monetary easing threatens to cause “severe” inflation and exchange-rate volatility.
“Failure to manage the degree of easing may lead to concerns about mid- and long-term inflation and exchange-rate stability,”
the People’s Bank of China said in a quarterly monetary policy report, posted on its Web site today.
Bloomberg August 5 2009
China is growing incredibly fast.
If net exports contributed 3% to China's 12% growth in q2, China would have grown by a very respectable 9% even if its trade surplus didn't grow.
That is the missed opportunity.
This is a time when the global economy should be adjusting.
Brad Setser 19/7 2007
Yet with the dollar at a multi-year low -- and with the RMB still effectively pegged to the dollar -- China ends up getting a stimulus from the external side precisely when it doesn't need external stimulus. Right now, China's authorities want less growth, not more. China's premier famously called China's current pattern of growth unstable, unbalanced, uncoordinated, and unsustainable ...
If it is not too much of an intellectual stretch to say that China is part of the monetary union that is called the United States
— the 51st state, if you will —
then it is not too much of a stretch to say that what can go wrong is that China decides—or is forced—to secede.
Paul McCulley, June 2007
Who's the most powerful economist now?
We don't know his name. We don't even know if he IS an economist. But whoever runs Chinese financial policy - perhaps the head of the People's Bank of China - is the man to watch.
The Daily Reckoning, June 4, 2007
After spending Sunday afternoon in meditation on this subject - that whoever is the most important economist in the world is a smart guy. He's not going to do anything stupid. After all, he didn't get to where he is by being dumb.
True - Ben Strong was not exactly an idiot, either.
And the fellow running British financial policy back in the '20s was none other than Winston Churchill.
Saudi Arabia is running the U.S. economy.
Because the United States still doesn't have a national energy policy, we've thrown decisions about how fast our economy grows and whether our standard of living rises or falls into the hands of Saudi Arabia's oil ministry.
Jim Jubak 5/6 2007
By the Fed's own admission, the growth of global liquidity has reduced the U.S. central bank's ability to control interest rates -- and thus the economy -- in the United States. Think about this: The Fed raises short-term interest rates relentlessly from their 1% low in June 2003, and yet long-term rates sink as global cash flows overwhelm the Fed's domestic policy shifts.
See also: Conundrum
The G7 should, instead, be replaced by a multilateral body that can address such issues more effectively.
China’s current account surplus has exploded in recent years from a modest $46bn in 2003 to $250bn last year. (Japan $170bn)
Martin Wolf FT 30/5 2007
The Shanghai market has dropped 20 per cent in a week from the record high of 4,334.92 points it reached last Tuesday.
FT 5/6 2007
Alan Greenspan said he was concerned Chinese stocks might undergo a ``dramatic contraction''
after its main stock index jumped more than 90 percent this year.
May 23 2007 (Bloomberg)
When Mr. Greenspan spoke at the annual dinner of the American Enterprise Institute in Washington The Dow Jones Industrial Average had crossed 5000 in November 1995 and 6000 in October 1996. On the day of Mr. Greenspan's speech, the Dow industrials stood at 6437, more than twice the level it reached only four years earlier.
Jeremy Siegel, WSJ 6/12 2006
Dated perceptions of China
China runs a surplus with the US but a deficit with the rest of the world, so its trade is in rough balance.
New realities: China runs a big surplus with the world, not just the US.
The World Bank estimates that China’s 2006 current account surplus will reach $230b,
or 8.7% of China’s GDP.
Brad Setser 5/4 2007
The U.S. Commerce Department announced Friday that it will reverse its decades-long policy and begin to impose trade tariffs on some subsidized imports from China.
CNN March 30 2007
The growing mood in Congress for passing trade protection legislation that could start a series of retaliatory actions around the world that could result in a trade war, a la Smoot Hawley in the 1930s.
John Mauldin march 2007
Stephen Roach, Chief Economist at Morgan Stanley, writes a rather chilling description of his recent testimony before the Senate Finance committee. He noted that as he entered the room, he looked up and saw a picture of Senator Reed Smoot on the walls, as Smoot was a former chair of the committee and the co-sponsor of the Smoot-Hawley Tariff Act of 1930, largely responsible for the Great Depression.
Roach also accurately notes:
"America's middle-class angst - which is driving the politics of China bashing - reflects a US economy that failed to prepare its workforce for the pressures of an IT-enabled globalization."
Book review:
The Writing on the Wall: China and the West in the 21st Century by Will Hutton
Hutton takes on the most important political and economic story of our time. He has also produced a thought-provoking, wide-ranging and largely correct analysis.
The book advances five fundamental and, in my view, fundamentally correct propositions.
First, for all its manifest achievements, the Chinese attempt to marry a communist party-state with the market is unsustainable.
Martin Wolf 4/2 2007