Relevant and even prescient commentary on news, politics and the economy.

Increasing internal demand in China for goods needs more thoughtful analysis

A shift to more internal demand for China might not benefit the US in ways we think it will. One such area is the impact of increased demand for resources and energy. And another is where the jobs are. China Puts Up More Money to Build Solar Capacity The government-owned China Development Bank has just […]

Chinese Yuan

The economic headline this morning is that China has agreed to allow the yuan to appreciate. The announcement is being credited with about a 1% higher opening for the stock market and numerous pundits are claiming this will make a significant difference. But this has happened before and it had little impact. From 2004 to […]

China’s not the answer for the Eurozone

by Rebecca “Go long whatever Chinese consumers buy and go short Chinese capital spending (construction) plays. Consistently, go long tech/short material stocks.” That is the first sentence of a BCA Research report’s executive summary on China equity strategy (link not available). Rather than a global equity strategy, I’d like to put this into an economic […]

Get ready for a little EM inflation

Today I was thinking about tightening cycles in emerging markets; and more specifically, about that in China. Because let’s face it, China matters. China matters to the rest of Asia via competition for export income. China matters to Europe via competition for jobs. China matters to Brazil via domestic production via imports. China matters. The […]

Why China may have slowed Treasury purchases

by Bruce Webb There has been a scattering of stories about how China has slowed or stopped buying U.S. Treasuries. This story offers a possible explanation LA Times: China’s investments in U.S. up sharply Beijing is using its accumulation of billions of American dollars to step up its investments around the globe. In the last […]

Marshall Auerback responds

Marshall Auerback responds to Rebecca’s “I have to side with China on this one”. There’s another factor as well. There’s been an enormous increase in money and credit in the past year. In fact, it seems to be as great as 5 years’ growth in credit in the previous Chinese bubble. What happens is that […]

Industrial policy is not just green technology or an electric car…

The New Yorker gives us a small look into policy in china other than the currency peg: The Problem Statement U.S. manufacturing’s competitive status is increasingly challenged by other economies. Established industrialized nations such as Japan, Germany, Korea and Taiwan are developing state-of-the-art technologies, which range across all areas of manufacturing from electronics to discrete […]

Inflation in China is not necessarily a bad thing

Yesterday, the release of key economic indicators in China produced headlines like this: China Targets Inflation as Economy Runs Hot. The table below lists the full release, including the consensus expectations (Bloomberg’s survey) for each statistic. (Here is the link for the actual data release.) As you can see, the survey undershot the actual results […]