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China
High Road to China, The Movie
Youtube
China wants to break the ultimate taboo and buy into Western companies such as Apple, Boeing and Intel
China has punctured the last delusion. There will be no rescue of Italy until Europe agrees to major strategic concessions
Ambrose Evans-Pritchard, in Dalian, China, 14 Sep 2011
Mr Wen said he had spoken to José Manuel Barroso, the president of the European Commission, laying the conditions for Chinese intervention.
"I made clear to him that we are confident Europe will overcome its difficulties and make a full recovery. We have on many occasions expressed our readiness to extend a helping hand, and that we are willing to invest more in European countries."
"At the same time, we need bold steps to give redirection to China's strategic objective. We believe they should recognise China's full market economy status," he said, referring to World Trade Organisation (WTO) rules.
"To show one's sincerity on this issue ... is the way a friend treats another friend," he said, answering a question after his speech.
Peak Oil
The reason, as with so many global economic trends, can be summed up in a single word: China.
Since 2008, the last time oil passed $100 per barrel, demand in the developed world has fallen by 2.7m barrels per day,
or 6 per cent, and 4 per cent in the US, according to Trevor Houser of the Rhodium Group in New York.
At the same time, demand in developing countries has grown by 4.4m b/d, or 11 per cent, with China accounting for roughly half that growth.
FT April 25 2011
Kina
USA:s största fordringsägare med över 1150 miljarder dollar placerade i amerikanska statspapper
Andreas Cervenka, SvD e24 25/4 2011
Det senaste året har kineserna blivit allt mer irriterade och öppet mästrande gentemot Washington. Det är ju trots allt Kina som tagit ansvaret för att hålla igång världsekonomin när USA och Europa sanerar på hemmaplan. Förra året växte Kinas BNP med 10 procent och takten håller i sig i år.
Unscientific but entertaining estimates of how long citizens would need to work
to afford a 100-square-metre apartment in central Beijing, which currently sells for about Rmb3m ($450,000)
FT December 23 2010
USA hotar med tullar och extremt expansiv penningpolitik
för att få fart på den inhemska ekonomin, pressa upp inflationen och därmed driva ner värdet på dollarn.
Källan till striden om valutapolitiken är den traditionella: växelkursen är bestämd av staten – inte av marknaden.
Lars Jonung, Kolumn DN 27/10 2010
Samtliga faktorer som gjorde dollarn till världsvaluta har försvagats.
Dagens finanskris har avslöjat oroväckande brister i USA:s ekonomi och finansväsende.
Euron blev en framgång. Den är i dag efter dollarn den främsta reservvalutan.
Kina har behövt USA som marknad för sin export och USA har behövt Kina som finansiär av sina underskott – alltmedan de globala obalanserna obönhörligt cementerats.
Vägen till friare växelkurser och kapitalflöden – den värld som Cassel drömde om – är farofylld. Men större flexibilitet i det internationella valutasystemet krävs för att undvika en ”ödeläggelse” i stil med 1930-talets. I denna nya värld kommer världsvalutor som den amerikanska, europeiska och kinesiska kunna leva i fredlig konkurrens och samexistens.
By a vote of 348-79, Democrats and Republicans alike put aside their acrimonious differences and agreed, at least for a moment,
to stop blaming each other for the sad state of American economic life.
Instead, they agreed to blame China.
The bill is the perfect campaign gesture, bombastic, angry, self-righteous, and without much real-world consequence.
Zachary Karabell, Huffington Post, September 30, 2010
The office AFL-CIO union leader Richard Trumka issued a statement that encapsulated the thinking behind the bill: "the House of Representatives voted to put an end to the Chinese government's currency manipulation, which has destroyed millions of good American manufacturing jobs. For more than a decade, the Chinese government has deliberately manipulated the value of its currency, ballooning our trade deficit with China and costing American communities good jobs....Working people continue to mobilize to elect candidates who will put America's workers first and are committed to rebuilding an economy that values working people. This November we will send a powerful message that we will support those who vote for an economy that works for everyone."
The idea is that there is direct line between China, its currency, its exports of lower-cost goods to the United States, and the erosion of middle-class life and now soaring unemployment. But U.S. manufacturing has been bleeding jobs for decades, since the early 1970s, when the Rust Belt began to decay faced with competition from the likes of Japan and Germany. That continued almost unbroken for the next decades, as countries ranging from Taiwan to Mexico became the low-cost producers (remember Ross Perot's famous warning about NAFTA in 1992 and "the giant sucking sound" of jobs heading south-of-the-border?). California and the state of Washington were hit hard by cuts in defense spending in the early 1990s, and industry throughout the country shed jobs as technology and robotics allowed fewer workers to do more. China is simply the latest example of these trends and hardly a cause.
Of course, reason and fact aren't driving these measures. Emotion, anger and frustration are. There are good reasons to be angry with the state of affairs in this country and frustrated by the inability of the political class to do more than contribute to the confusion
John Connally, Nixon’s secretary of the Treasury, famously told the Europeans that
the dollar “is our currency, but your problem”.
The Chinese respond in kind. In the absence of currency adjustments, we are seeing a form of monetary warfare: in effect,
the US is seeking to inflate China, and China to deflate the US.
Both sides are convinced they are right; neither is succeeding; and the rest of the world suffers
Martin Wolf, FT September 28 2010
This is not the first time for such currency conflicts. In September 1985, now 25 years ago, the governments of France, West Germany, Japan, the US and the UK met at the Plaza Hotel in New York and agreed to push for depreciation of the US dollar.
¨
China may post its first trade deficit in six years
after a surge in imports of commodities and consumer goods, weakening U.S. arguments that the nation is keeping its currency undervalued to gain an advantage.
Bloomberg April 9 2010
The Chinese currency policy is, in effect, a development policy that works by subsidising foreign consumers who buy Chinese goods.
The export machine, at its peak in 2008, was running a colossal $426bn current account surplus.
China is sticking with this mercantilist policy. This year, its current account surplus is expected to be $291bn
FT Editorial March 19 2010
China and Germany unite to impose global deflation
Germany is in a supposedly irrevocable currency union with some of its principal customers. It now wants them to deflate their way to prosperity in a world of chronically weak aggregate demand.
I am beginning to wonder whether the open global economy is going to survive this crisis.
The eurozone may also be in some danger.
Martin Wolf, FT March 16 2010
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