Tag Archives | China

Global auto markets depend on China for growth

Global auto markets have started to move in new directions.  That much is clear from comment by the major national auto associations.  This will be a shock to manufacturers, who have over-expanded production.  Price wars and capacity cutbacks are inevitable if the industry forecasts are correct. The chart  starts from 2005, and shows the 7 major […]

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Polyethylene, shadow banking and China’s ‘collateral trade’

The blog’s latest post for the Financial Times, published on the BeyondBrics blog is below. By Paul Hodges of International eChem Strange things are happening in China’s polyethylene (PE) market. Despite a slowdown in the economy, demand is surging. Our research suggests that PE, like copper and iron before it, is the latest instrument of China’s […]

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Do you know where your polyethylene is in China?

In the late 1970s and early 1980s, New York Mayor Ed Koch fronted a series of public service TV commercials asking parents: “Its 10pm.  Do you know where your children are?” The blog was reminded of this when checking China’s polyethylene (PE) import data on Global Trade Information Services for the January – May period, as shown […]

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$15bn gold loan scam revealed: Beijing property sales fall 50%

Almost every day brings new revelations about the growing evidence of major fraud in China’s ‘collateral trade’.  Yet the world’s financial markets remain very complacent.  They have forgotten the basic rule, that the first example is usually the tip of the iceberg – not a one-off mistake. They have also forgotten that the real problems only emerge when […]

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China GDP reports remain “man-made and therefore unreliable”

The blog got 54.8m results from Google when it entered the phrase “China GDP” this week.  The only problem, seemingly unrecognised by most analysts, is that China’s GDP report is a completely fictitious number, invented by the leadership each quarter to suit its own narrative. This sounds a bold statement, but it isn’t: China is the only country to […]

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‘Bubble, bubble, toil and trouble’ as China, West’s policy diverge

Sometimes its good to take a step back from the day-to-day markets, and focus on the bigger picture.  Thus the chart looks at how markets have moved since the start of 2008 when the sub-prime bubble came to an end: Prices peaked in June/July 2008 as oil peaked at $147/bbl (blue line) and naphtha at $1147/t […]

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Qingdao probe the ‘straw on the camel’s back’ for world markets

The blog’s new Research Note in the ‘Your Compass on China’ series highlights the way that China’s commodity imports have been used to finance its housing bubble.  This is clearly a shock for investors, who have till now believed the imports were a sign of its superior economic policies and long-term growth prospects. The Qingdao probe could […]

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Winners and losers from the end of China’s property bubble

As promised yesterday, the blog looks today at the potential Winners and Losers from President Xi Jinping’s ‘China Dream’.  It is a complete break from the policies of the previous leadership, which ended up being based on a ‘wealth effect’ created by an unsustainable property bubble. Xi’s programme is emphatically about the longer term.  There […]

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China dream

President Xi Jinping’s ‘China Dream’

A new type of leader seem to be starting to emerge in China and India.  President Xi Jinping in China, and premier Narendra Modi in India, are not spending much time studying the output of focus groups or investment bank analysts.  Nor do they have ‘spin-doctors’ worrying about every phrase on the 24-hour news channels. Instead, they […]

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China map a

Prime Beijing house prices drop 40% since December

China’s property market is the epicentre of the global debt bubble discussed yesterday.  It has been red-hot since urban residents became free to buy their own home in 1998.  Before then, they lived where the state told them.  With interest rates held low to boost state-funded infrastructure spending, people had few options for investing their money. The […]

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