China - Economic Data & News 05 (Oct 10 - Jun 11)

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby profittaker » Tue Nov 30, 2010 1:23 pm

China's 'bubble about to burst'
Hedge fund manager Mark Hart warns of imminent implosion of world's second-largest economy
by THE DAILY TELEGRAPH 05:55 AM Nov 30, 2010

FORT WORTH (TEXAS) - China is in the "late stages of an enormous credit bubble", according to American hedge fund manager Mark Hart, who has made millions predicting the crises in the United States sub-prime market and European debt.

Mr Hart, who runs Corriente Advisors from Fort Worth, Texas, has launched a fund to bet on the imminent implosion of China.

He warns of an "economic fall-out" that will be as "extraordinary as China's economic out-performance over the last decade".

Asking investors for a minimum of US$1 million ($1.32 million) each for its China Opportunity Master Fund, Corriente will use sovereign and corporate credit default swaps, interest rate and foreign exchange options to trade on its expectations of a collapse.

Mr Hart, who launched a record-performing US sub-prime fund as early as 2006 and in 2007, a fund that bets on a European debt crisis, warns investors: "Complacency among market participants regarding China is eerily similar to the complacency exhibited prior to the US sub-prime crisis and European sovereign debt crisis."

Mr Hart says "inappropriately low interest rates and an artificially suppressed exchange rate" have created dangerous bubbles in sectors including:

(a)Raw materials: Correinte says China has consumed only 65 per cent of the cement it has produced in the past five years, after exports. The country is currently producing more steel than the next seven largest producers combined - it now has 200 million tonnes of excess capacity, more that the European Union and Japan's total production so far this year.

(b)Property prices: The average price-to-rent ratio of China's eight key cities is 39.4 times - this figure was 22.8 times in America just before its housing crisis.

Corriente argues: "Lacking alternative investment options, Chinese corporations, households and government entities have invested excess liquidity in the property markets, driving home prices to unsustainable levels."

(c)Banking: As with the credit crisis in the West, the banks' exposure to the infrastructure credit bubbles is not obvious because the debt is held in Local Investment Companies (LIC) - shell entities which borrow from Chinese banks and invest in fixed assets.

Mr Hart reckons that "bad loans will equal 98 per cent of total bank equity if LIC owned, non-cashflow producing assets are recognised as non-performing".

As a final blow, Mr Hart says that the market belief that the Chinese government has "ample resources" to bail out its banks is flawed.

Corriente's analysis of the ratio of China government debt to GDP comes out at 107 per cent - five times higher than official numbers.

The hedge fund says this number uses "conservative assumptions" and the real figure could be as high as 200 per cent.

The result is that, rather than being the key engine for global growth, China is an "enormous tail-risk", Mr Hart says.

http://www.todayonline.com/Business/EDC ... t-to-burst
learning to swim. Welcome to comment on my Options trading journal
User avatar
profittaker
Boss' Left Hand Person
 
Posts: 502
Joined: Mon Jan 04, 2010 10:26 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby LenaHuat » Tue Nov 30, 2010 8:40 pm

The Chinese are bidding for Picassos in HK auctions :o
Please be forewarned that you are reading a post by an otiose housewife. ImageImage**Image**Image@@ImageImageImage
User avatar
LenaHuat
Big Boss
 
Posts: 3985
Joined: Thu May 08, 2008 9:35 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby winston » Thu Dec 02, 2010 3:06 pm

DJ China Econ Planner: Vegetable Prices Fell 6% In Week To Nov. 28

BEIJING (Dow Jones)--Vegetable prices in China fell 5.9% in the week to Sunday, the National Development and Reform Commission said Thursday.

The government has been stepping up a series of measures to cap food prices following recent sharp gains.

The campaign achieved 'success in limiting the trend of rising vegetable prices,' the NDRC, China's top economic planning agency, said in its survey of 18 vegetables in 36 mid- to large-sized cities.

Average wholesale prices fell to CNY3.50 a kilogram last week, down 5.9% in the week and 9.1% lower from the beginning of November, it said.

Among other measures, key cities in major urban areas have set aside funds for investment in additional agriculture infrastructure.

From October to March, the city of Beijing will set aside eight types of vegetables in a 10,000-metric-ton reserve, it said.


Source; Chuin-Wei Yap, Dow Jones Newswires
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 105007
Joined: Wed May 07, 2008 9:28 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby winston » Fri Dec 03, 2010 6:54 am

Why China's Leading Indicators Are A Big Flashing Warning Light To Albert Edwards; A Triple Dip Headfake In The US? by Tyler Durden

As usual, Soc Gen's Albert Edwards does not pull any punches: "Once again, investors see China plays as the only investment game in town. Dylan and I remain convinced we are witnessing a bubble of epic proportions which will burst – catching investors as unawares as the bursting of the Asian bubbles of the mid-1990s."

Already we have seen traces of Edwards proving correct after the Chinese market has swooned dangerously in the past week.

Should the world realize that, as Edwards claims, even near-unlimited liquidity is insufficient to keep the system going, then the China-initiated avalanche will be severe.

Not only that, but in the recent fake economic renaissance (sorry, unwind QE1, QE Lite and QE2 and then we'll talk how real this recovery is) Edwards sees nothing less than the shades of the dreaded 1990s economic Triple Dip...

http://www.zerohedge.com/article/why-ch ... e-dip-head?
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 105007
Joined: Wed May 07, 2008 9:28 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby Poles » Tue Dec 07, 2010 8:59 am

http://www.telegraph.co.uk/news/worldne ... pires.html

WikiLeaks: China's Politburo a cabal of business empires
China's ruling Politburo is a cabal of business empires that puts vested interests over the needs of the poor and curtails media freedoms to avoiding having shady business deals exposed in the press, according to a leaked US government diplomatic cable.



The damning description of China's secretive leadership machinations also described how the descendants of China's Communist revolutionaries – known as "princelings" – derided officials from less august revolutionary backgrounds as mere "shopkeepers".

The assessment of what motivates China's opaque top-level decision-makers was relayed to Washington in July 2009 in one of the 250,000 cables published by the WikiLeaks website.

"China's top leadership had carved up China's economic 'pie,'" the US embassy contact said, "creating an ossified system in which 'vested interests' drove decision-making and impeded reform as leaders maneuvered to ensure that those interests were not threatened." The US embassy contact also asserted there were no "reformers" within the top Communist Party leadership, only competing factions that sought to protect their business empires from attack by in-coming leaderships.


The source said that it was "well known" that former Chinese premier Li Peng and his family controlled China's "electric power interests" while the country's security tsar Zhou Yongkang controlled the state monopoly of the oil sector.

The wife of China's premier Wen Jiabao, a popular figure in China often affectionately referred to as "grandpa Wen" for his feelings for the common man, is said to control China's "precious gems" sector, while Jia Qinglin, ranked fourth in the Politburo, has "major Beijing real estate developments".

Further down the political food-chain, the desire of local officials to protect current business interests also explained China's reluctance to rein in rising inflation and take steps advocated by international economists to re-orientate its economy more towards domestic consumption.

"They [local officials] always supported fast-growth policies and opposed reform efforts that might harm their interests," the contact said, adding, "As a result, the proponents of "growth first" would always be in a stronger position than those who favored controlling inflation or taking care of the poor." The assessment also said that economic self-preservation was one of the key reasons why China's leaders were so resistant to increased media freedoms.

"Vested interests were especially inclined to oppose media openness, he [the contact] said, lest someone question the shady deals behind land transactions." China's reluctance to engage in political reform is to be highlighted this week when Liu Xiaobo, the dissident author of the Charter 08 petition for greater rights in China, is awarded the Nobel Peace Prize "in absentia" after being jailed in China for 11 years for challenging state power.

The perception inside China that the country is run in the interests of a Party elite is also growing, with an online poll last February by the state-run China Daily finding that more than 90 per cent of Chinese believed that the new rich had achieved their wealth through political connections.

The web of commercial interests also forces China's modern rulers to act by consensus, with the current President Hu Jintao likened to the "Chairman of the Board or CEO of a big corporation", juggling factional interests, unlike the autocratic figures of Mao Tse-tung or Deng Xiaoping who could rule by fiat.

The man tipped as China's next leader, Xi Jinping, was selected, not for his leadership qualities but, the contact said, because he "maintained a non-threatening low profile and had never made enemies" and could be relied upon not to wage political vendettas through anti-corruption investigations.

"The central feature of leadership politics was the need to protect oneself and one's family from attack after leaving office. Thus, current leaders carefully cultivated proteges who would defend their interests once they stepped down," the contact said.

In the past in-coming Chinese leaders have consolidated their position by instituting crackdowns, with Jiang Zemin, the former president, shutting down a number of businesses owned by the associates of his predecessor, Deng Xiaoping, when he came to power in the early 1990s.

A similar process was observed in 2003 after Hu Jintao took office, with several high-level figures in Jiang Zemin's Shanghai power-base facing investigations and purges that analysts said were aimed at curtailing the power and influence of the Jiang faction.

The contact also outlined the scornful factionalism that divided the scions of the old 'red' families – those with revolutionary lineage whose fathers and grandfathers fought to bring the Communists to power in 1949 – and those who had risen up the Party ranks, so-called "shopkeepers".

China's current leaders, President Hu Jintao and prime minister Wen Jiabao, both fall into the latter category, while the putative next leader, 57-year-old Xi Jinping, is the son of a revolutionary hero Xi Zhongxun and often referred to as a 'princeling'.

The US embassy contact said that China's princelings felt they had a "right" to the fruits of the revolution, recalling one family deriding those without revolutionary pedigrees by saying: "While my father was bleeding and dying for China, your father was selling shoelaces"
User avatar
Poles
Boss' Right Hand Person
 
Posts: 1023
Joined: Fri Jun 20, 2008 12:33 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby winston » Tue Dec 07, 2010 9:08 pm

Top Chinese official says some economic data 'man-made'

Chinese Vice Premier Li Keqiang, widely tipped to be the next premier, admitted in 2007 that some of the country's economic data was "man-made" and thus unreliable, leaked US diplomatic cables show.

Li -- whom analysts expect will succeed Premier Wen Jiabao in the coming years -- was the top Communist Party official in the northeastern province of Liaoning when he made the remarks to then-US ambassador Clark Randt.

When evaluating the province's economy, Li said he focused on three figures -- electricity consumption, volume of rail cargo and the amount of loans issued, a confidential memo released by whistleblower website WikiLeaks said.

"By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth," the cable said.

"All other figures, especially GDP statistics, are 'for reference only,' he said, smiling."

If Li succeeds Wen as expected in 2013, he will be responsible for the day-to-day running of government as well as economic policy in the world's second-largest economy.

During the dinner in Beijing, Li mainly focused on the challenges of administering the province and trade relations between the United States and China, which he described as "developing smoothly".

Li said the income gaps in Liaoning "remain severe" despite official statistics showing the province recorded "brisk economic growth of... 12.8 percent in 2006".

"GDP figures are 'man-made' and therefore unreliable, Li said," according to the leaked notes of the dinner.

Analysts have long questioned the reliability of data provided by local government officials in China, whose career prospects depend on the pace of economic growth in their region -- giving them an incentive to beef up figures.

WikiLeaks has released 250,000 US diplomatic cables, embarrassing a number of US allies and foes.

China's foreign ministry has refused to comment on individual cables that make reference to Beijing, describing the content of the website as "absurd".

Some of the documents contained allegations that China may have turned a blind eye to illicit exports of North Korean missile parts and that the top Chinese leadership orchestrated cyberattacks on Google and other US targets.

In one cable, Chinese officials are quoted as calling the erratic regime in Pyongyang -- China's close ally -- a "spoiled child".

Source: AFP Asian Edition
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 105007
Joined: Wed May 07, 2008 9:28 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby winston » Wed Dec 08, 2010 10:06 am

DJ China Moves Up Release Of November Economic Data To Saturday

BEIJING (Dow Jones)--China will issue its economic data for November on Saturday, the National Bureau of Statistics said Wednesday.

The data, including inflation and investment figures for the month, had been scheduled for release Monday, according to the bureau's preliminary plan.

The bureau said in a statement posted on its website it changed the day to keep the date of the release consistent with previous months.

An official at the bureau's news department said the bureau aims to issue monthly economic data around the 11th of each month.

Source: Victoria Ruan, Dow Jones Newswires
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 105007
Joined: Wed May 07, 2008 9:28 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby winston » Fri Dec 10, 2010 7:29 pm

China raises bank reserve levels to curb lending

China ordered its banks to increase their reserves in a move to curb surging lending as financial markets watched for a widely anticipated interest rate hike amid efforts to cool inflation.

The order Friday by the People's Bank of China told commercial lenders to increase minimum reserves by 0.5 percent of deposits.

"A rate hike still cannot be ruled out this weekend," said Mark Williams, an analyst for Capital Economics, in a report.

The announcement came as Chinese leaders began an annual economic planning meeting that is expected to run through Sunday.

"It may be that the People's Bank has chosen to defer a symbolically more significant move on interest rates until those discussions have concluded," Williams said.

On Friday, regulators announced Chinese banks lent a total of 564 billion yuan ($82 billion) in October. That would push total lending so far this year to 7.45 trillion yuan and mean they would likely overshoot Beijing's official 2010 lending target of 7.5 trillion yuan.

The state press has carried reports on the necessity of a rate hike, apparently to prepare the public and entrepreneurs for a change.

The ruling Communist Party's top body, the Politburo, announced Dec. 3 that it was ordering a "prudent monetary policy" next year, a change from the "relatively easy" credit policy in place throughout the crisis.

The Oct. 19 hike pushed the lending rate on a one-year loan to 5.56 percent. JP Morgan & Co. says it expects three to four more increases beginning as early as this month and pushing the benchmark rate to 6.31 percent by mid-2011.

Analysts believe a key worry for policymakers is the low rates paid on Chinese bank accounts. Inflation has risen well above the 2.5 percent paid on deposits, which has prompted an outflow of money into stocks and real estate as families seek a better return, fueling fears of a dangerous price boom and bust.

___

People's Bank of China (in Chinese): http://www.pbc.gov.cn

Source: AP News
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 105007
Joined: Wed May 07, 2008 9:28 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby winston » Sun Dec 12, 2010 8:08 pm

China vows stable growth, inflation management

China's leaders wrapped up an annual economic planning meeting Sunday with a pledge to keep growth on track while stepping up moves to combat inflation and other potential destabilizing problems.

The vow to keep the economy on an even keel came a day after the government reported that inflation surged to a 28-month high in November, despite efforts to counter speculation and increase food supplies.

A brief statement by the official Xinhua News Agency announcing the end of the conference, held each year in early December, gave no details. It said the government would keep its policy flexible, proactive and prudent while trying to maintain a balance between fast growth and stability.

Inflation surged to 5.1 percent in November, way above the government's original target of 3 percent. It was mainly driven by an 11.7 percent year-on-year jump in food and utility prices.

The higher-than-anticipated rate raised expectations that China's central bank will go ahead with another interest rate hike, acting to slow growth at a time when the U.S. and Japan are still focusing on stimulus for their own lagging economies.

Beijing has sought to reassure the public that it has inflation under control, cracking down on speculation in commodities and ordering refineries to quickly raise production to counter diesel shortages.

"Prices will be stable as long as ministries and regional authorities earnestly implement the central government's measures," Xinhua quoted Sheng as saying Saturday.

While authorities say three-quarters of the jump in inflation is due to higher food prices, Beijing is struggling to curb a flood of money circulating through the economy from massive stimulus spending and bank lending that helped China rebound from the global crisis.

On Friday, China ordered banks to increase their reserves by 0.5 percent of deposits to help curb surging lending, the third reserve increase in five weeks.

Chinese banks lent a total of 564 billion yuan ($82 billion) in October. That would push total lending so far this year to 7.45 trillion yuan, suggesting it will overshoot Beijing's official 2010 lending target of 7.5 trillion yuan.

China raised interest rates Oct. 19 for the first time since the crisis, highlighting the divergence of its robust expansion from the United States, Europe and Japan, which still are trying to shore up growth.

Source: AP News
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 105007
Joined: Wed May 07, 2008 9:28 am

Re: China - Economic Data & News 05 (Oct 10 - Mar 11)

Postby investar » Thu Dec 16, 2010 12:06 am

A good piece of research on the Chinese consumer with some good links on other reports from the Reuters China Investment Summit:

http://graphics.thomsonreuters.com/AS/p ... nsumer.pdf
investar
Foreman
 
Posts: 387
Joined: Tue Feb 16, 2010 11:59 pm

PreviousNext

Return to Archives

Who is online

Users browsing this forum: No registered users and 3 guests