Huawei has hit its second snag in an attempted
M&A deal in America. In this case the US government aims to force them to
divest their October purchase of server technology from a California firm
called 3Leaf. The Committee on Foreign Investment did not comment on why the
deal was rejected, but it is expected that, as in the [...]
Nobody could accuse
Chinese policy makers of being ignorant of their economy’s weaknesses, but they
have not done much to address them either. In 2007, Premier Wen Jiabao said China’s economy was “unstable,
unbalanced, uncoordinated, and unsustainable.” The 2006-10 Five-Year Plan
pledged to alleviate China’s reliance on exports and investment for growth,
while reducing inequality by boosting incomes in the [...]
In the Ming Dynasty, (1368 – 1644), China
established an examination system as a merit-based approach for
appointments to government office. There were three levels to the exams,
with the final cut then coming through an examination administered by
the Emperor himself. The subject matter of the exams was standardized
beyond anything we see today. It was based [...]
Once
again I am starting to hear investors tell me that they have been
advised by bank analysts not to worry too much about the impact of a
banking crisis in China. According to this argument, China has
developed a very efficient and low-cost way to address banking crises,
and the proof is that China’s last banking crisis, which [...]
After over fifteen years on the drawing-boards, the
Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project was
approved by the four countries’ leaders, meeting in Ashgabat in
December. While the intergovernmental agreement naturally depends upon
follow-on negotiations to be realized, it is anticipated that sales and
purchase agreements will be signed at another four-way meeting that
could take place as early as [...]
In a recent White House meeting with President Asif Ali Zadari of Pakistan, US President
Barack Obama underscored the importance of the US-Pakistani relationship and
emphasized continued US support for the country. Unfortunately, the prospects
for a payoff to US strategic commitments in Pakistan remain clouded by deep
economic weaknesses that have their origins as much in demographics and
political [...]
Most of this week’s newsletter was
about the release last week of China’s fourth quarter GDP growth numbers
by the National Bureau of Statistics (NBS). You can find the full NBS
report on their website, but here is the key paragraph:
According
to preliminary estimation, the gross domestic product (GDP) for the
year 2010 was 39,798.3 billion yuan, up by [...]
Michael Pettis has released one of his carefully reasoned posts, this
one on the dark art of guesstimating what China’s GDP really is, given
the notorious unreliability of its official data.
The strength of Pettis’ approach sometimes works to his advantage. He
does a great job in breaking down his arguments to clear, easy to
understand, step-by-step reasoning. [...]
Reserve Bank of India’s monetary policy decision on Jan. 25th
was disappointing and lame.
On January 27, 2011, S&P
downgraded Japanese long-term debt from AA to AA-, putting Japan’s credit
rating on par with China. The ratings agency cited Japan’s rising deficits and
the government’s “lack of a coherent strategy to
address these negative aspects of the country’s debt dynamics.” Though its gross-public-debt-to-GDP
ratio is highest among OECD countries at around 189%, Japan’s government [...]