By John Richardson IF you repeat something enough times, such as the “emperor is wearing clothes”, lots of people begin to believe it. So is the case with the widespread idea that we are in the midst of an unshakeable synchronised global economic recovery. The problem with these kind of economic theories is that as […]
Asian Chemical Connections
China, Chemicals And Interest-Rate Arbitrage
By John Richardson WHACK A MOLE on the head and another one pops up somewhere else. This is tremendous fun as an arcade game but not that much fun, metaphorically speaking, for the Chinese government. “The commodity-backed loans at the centre of a probe into an alleged financial scam at a Chinese port [Qingdao] are […]
China’s SMEs, Good And Bad, Under Threat
By John Richardson THE cosy relationship between the state-run banks and state-owned enterprises (SOEs) has long held back economic rebalancing, but wasn’t a critical problem for small-and-medium-sized enterprises (SMEs) when official lending tripled in 2009 (have a look at the chart on polypropylene in this post, which illustrates the impact). There was, of course, plenty of […]
China’s New Stimulus Package: What It Means For Chemicals
By John Richardson CHINA’S petrochemicals markets are likely to enjoy a confidence rally as a result of yesterday’s announcement of a mini economic stimulus package. The details of the stimulus package include: More railway construction. The State Council released plans on Wednesday to sell $24 billion US of bonds this year to build railways in […]
It Is Not A Question Of If, But Rather When
By John Richardson IT is not a question if, but rather when Xi Jinping and Li Keqiang decide that enough is enough and get on with tackling China’s growing financial imbalances. That is if they don’t want the whole house of cards to eventually collapse, which we believe is not the case. These imbalances have […]
China Debt Dwarfs The Fed’s Quantitative Easing
YESTERDAY we highlighted how a crucial government meeting takes place in November in China. This could well outline the blueprint for economic reform over the next few years. A major challenge facing China’s new leaders is the unsustainable surge in debt since 2008 – a problem we have been highlighting for several years now. […]
China’s “Overwhelming” Overcapacity
By John Richardson A HOPE being expressed by chemicals and polymer traders and producers the blog has spoken to this week is that the surge in lending in China during the first quarter will result in stronger GDP growth later this year. Total new financing, which includes both official bank loans and lending via the […]
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