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Asian Chemical Connections

China Reformer Sidelined

By John Richardson AN assumption is that economic reformers will win control of China’s Politburo after the once-in-a-decade leadership transition is out of the way (China’s new set of leaders are set to be announced during the 18th Party Congress, which begins on 8 November). The blog believes that this assumption needs to be rigorously challenged, […]

China Bad Debts

In the first of a series of blog posts on the major challenges facing China’s economy over the next 12-18 months, we look at bad debts.   High stakes in Hangzhou. Source of picture: Wikimedia     By John Richardson A fascinating blog post by Patrick Chovanec makes this very worrying observation about China’s bad debt […]

No Big China Relief

By John Richardson Wen Jiabao re-emphasised at the weekend that China’s economic policy would be tweaked rather than radically overhauled because inflation, despite declining further in April, remains a major threat. Anybody hoping for a stimulus package on the scale of that which was introduced in late 2008 is therefore likely to be disappointed. And […]

Asian Polyolefin Prices Tumble

By John Richardson Asian polyethylene (PE) prices slumped by $90-130/tonne last week on the eurozone crisis, the fall in oil prices and the imminent arrival in China of large volumes of Iranian material, according to ICIS pricing. A further factor dragging down the market was the start-up, expected by end-May, of Qapco’s low-density polyethylene (LDPE) […]

Consensus Misses The Point

 By John Richardson The consensus view on China remains that we have reached, or are near, the bottom of the decline in GDP (gross domestic product) growth. This was how yesterday’s release of the preliminary HSBC China Manufacturing Purchasing Managers Index for April was interpreted. Although the index contracted for the sixth month in a […]

China’s Changing Demand

By John Richardson THE nature of demand in China is changing, despite the belief among some chemicals analysts, and companies, that everything will soon return to normal. Here is a summary of our key arguments. Please print off and pin to your office, or boardroom, wall for discussion – and let us know if you […]

The H2 Recovery Story

By John Richardson THE majority of chemicals analysts have yet to wake up and smell the coffee, according to an industry observer. “South Korean stocks have come off by 15-30% since their big recovery in January, but it is only the timing rather than the overall sentiment that has changed,” said the observer. “The theory […]

China Economic Optimism

By John Richardson ECONOMISTS think China’s growth has bottomed out, thanks to unexpectedly strong March bank lending. They also think that interest rates will stay low for a long time, even if rates cannot be cut because of the inflation problem.  New loans in March totalled Rmb1trn ($159bn), more than banking analysts had expected. This renewed […]

MEG’s Fading Star

  By John Richardson CHINA’S mono-ethylene (MEG) market was supposed to be very strong this year. But instead, to date we have seen persistently weak market conditions that few people, least of all the traders, seem to have anticipated. The traders appear to have been taken in by the hype and booked cargoes for delivery […]

Wen’s Last Reform Push

By John Richardson Wen Jiabao has been at it again. His extraordinarily strong comments on Tuesday follow those he made last month about the risks of a return to the economic chaos of the Cultural Revolution. On this latest occasion, he has taken aim at the state-owned banks. China’s premier, who is to relinquish power […]

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