As the US, as the biggest creditor and exporter in the late 1920s was hardest hit by the Great Depression, China now looks to be taking the global slowdown on the chin. And in a further sign of distress, the Baltic Dry Index, a measure of contracting prices for dry cargo shipping (and seen as […]
Read more...Even though the markets took cheer from China’s rate cut today, the move appears to be in response to an intensification of its economic woes. From Bloomberg: Some economic indicators in China showed a “faster decline” in November, the nation’s top economic planner said, underlining the urgency of government measures to support growth and employment. […]
Read more...Although the press has started paying attention to the slowdown in growth in China, the focus has mainly been on Pearl River area, which is light manufacturing, primarily textiles, low capital intensity. But as the New York Times reports, the contraction is also hitting sectors where China has made substantial capital investment. The reason this […]
Read more...Comparisons to the Great Depression and to other nasty past downturns (Panic of 1873, anyone?) are coming fast and furious these days. But one thing that continues to surprise me is the frequency with which the US in 2007-2008 is being compared to the US of 1929-1930. I’ve mentioned in passing that China is in […]
Read more...This story from the BBC covers largely familiar ground as far as the deterioration of the Chinese economy is concerned, but in contrast to some other articles featured here, stresses the political implications of lower growth. Note that while many in passing observe that lower economic growth could be destabilizing for China, it also appears […]
Read more...It’s always a bit dangerous to generalize from one data point, even if if it is a big data point, like Long Beach, one of America’s most active commercial ports. Nevertheless, the New York Times uses it to present a vivid image of the economic, and in particular, trade slowdown. One focus is how imported […]
Read more...This front page New York Times story on factory closings in the Pearl River delta covers ground already discussed in some detail on this blog. However, its report gives more detail on the resulting labor unrest. From the New York Times: For decades, the steamy Pearl River Delta area of southern Guangdong Province served as […]
Read more...We have gotten so large to throwing large numbers around in the US thanks to the various Fed facilities that the significance of the Chinese move may not be as obvious as it would otherwise be. $586 billion is a massive number for an economy the size of China’s. Recall our first stimulus package here […]
Read more...The dreary forecast comes from Eric Fishwick, chief economist at CLSA, an Asia-focused private equity firm. His reports in particular contends that the Chinese cannot possibly meet its growth projections for next year. One does not cross the officialdom in China casually. That suggests that either 1) CLSA is quite confident they won’t be making […]
Read more...As Dani Rodrik, who saw this item first, said, “Why do I think this is really bad news?” Remarkably, the article suggests that XIe might not attend the November 15 summit in Washington to discuss the future of the world financial order. This would be particularly noteworthy given China’s strong desire to push for a […]
Read more...We managed to miss this story on China’s diesel imports sent to us by reader Michael. When oil prices rose so rapidly early in the year, many pointed to robust growth in demand from China, and expected that level of growth to continue. Skeptics like your contrarian blogger pointed out other factors could be at […]
Read more...Brad Setser and Nouriel Roubini have collaborated in research and publishing on currencies but since are working independently. Roubini issues a grim outlook for China (“Roubini Foresees Chinese Hard Landing“). A cornerstone of Roubini’s analysis was that China was export-dependent and exports are falling fast: Note that China is an economy is structurally dependent on […]
Read more...Sorry to be brief today, but these excepts from our local Dr. Doom stand on their own (although I know some will take issue with the proportion of the economy he deems to be export dependent): Let us consider now in detail the evidence that China may be on its way to a hard landing… […]
Read more...Note that Credit Suisse has lowered its price projections to $60 for 2009. The main reason for the lower price expectation is much worse than consensus forecasts for GDP growth, and with it, increases in oil and gas demand, from China. Click to enlarge (hat tip reader Michael):
Read more...Despite China’s seeming economic might, it was only a few years ago that the hidden losses in among its banks were a frequent subject of discussion in the Western press. Indeed, in 2006, Ernst & Young hastily withdrew a detailed report that estimated that bad debt losses among Chinese banks were well above prevailing assumptions, […]
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