China Economy

In case you were enjoying a holiday from the news, as well as work, here is our pick for your review:

Inflation: PMI 53.9 RT @newschina: China output moderates, factory inflation slows | Reuters: http://reut.rs/fKkaZb (See also: RMB RT @live_china: Yuan Rises to Strongest Since 1993 as China Cuts Import Costs – Bloomberg http://ff.im/-w33Cc

Interest rates RT [...]

It may not have a very friendly or festive tone, but this quote from Hu Xijin, editor of the Global Times (via China Digital Times) just had to be noted…

“You are driving a cart and we are driving a truck.”

While the “cart” here seems to be Australia (see below), the “truck” is clearly China, and [...]

The recent
suicides by over 60 poor borrowers in the Indian state of Andhra Pradesh
have brought the operations of microfinance institutions (MFIs) under
public scrutiny.
It is well documented by both print and electronic media that
these debt-driven suicides were due to coercive methods of loan recovery
used by commercial MFIs. The commercial MFIs operate as profit-making
non-banking financial [...]

The chef on the Titanic is said to have
survived the icy waters by thinning his blood with booze as the band played on.
China’s approach to the global financial crisis followed a similar strategy.

As the financial crisis has developed, a certain
strand of China punditry has developed along with it. This punditry starts with
the assumption that China runs an economic system called “state
capitalism.” This economic system, recognizable from previous developing
Asian states, pushes the economic structure in a certain direction through
targeted subsidies, public works projects, and various macro-economic controls.
The pundits [...]

Following the launch of the recent United Nations
Population Fund (UNFPA) report on the state of the world’s population, there
has been much worry that the size of Bangladesh’s population has now reached
164.4 million and is growing. Challenging the UNFPA figure, the government
claims that the country’s population is now only 146 million. Owing to the
unavailability of real-time [...]

Its official – Spain and Portugal will need to be bailed out soon.  How do I know? In one of my favorite TV shows, Yes Minister,
the all-knowing civil servant Sir Humphrey explains to cabinet minister
Jim Hacker that you can never be certain that something will happen
until the government denies it.

[...]

By freezing its exchange rate and pulling out all the stops on fiscal and
monetary stimulus, China got through the global recession with only a mild
slowdown in GDP growth. Now it is facing the inflationary consequences.
Consumer price inflation, after rising steadily all year, hit a 4.4% annual
rate in October, approaching the government’s red line. How will [...]

The most recent figures for Chinese gold
consumption have just been released, and my goodness they’re large. The
figures are up 480%
on last year to 209.7 metric tons in the past 10
months, accounting for 10% of
global production. 

The discussion about inflation in China is getting
a bit out of hand. Here’s Andy Xie’s most recent article where he describes
4.4% inflation in China as a prelude to hyper-inflation across the world:
I have argued before that the Fed’s QE will first
stoke inflation in emerging economies and, via commodities and trade, back to
the US.  Because the [...]