Tag Archives | China

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Every silver lining has a cloud

I am currently lucky enough to be visiting Asia every month. This also gives me a chance to ‘check the temperature’ as regards people’s outlook on the economy. And I think its fair to say that the mood has moved from optimism to caution. Good news is tempered by its potential downside.

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ExxonMobil regains top place

After 5 months, ExxonMobil is once again the world’s largest company by market capitalisation. PetroChina had overtaken it last November, but has since lost half its value in China’s stock market decline. Today, PC is worth $453bn, versus EM’s $455bn. China’s stock market has lost 25% so far this year. But PC has been particularly […]

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Inflation worries increase in China, USA

China announced yesterday that inflation had soared again last month, reaching 8.7%, versus the government target of 4.8%. Part of the increase is clearly due to the effects of recent major storms. But with the US Fed likely to cut rates soon, China remains in a difficult position. If it increases interest rates, then the […]

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M&S dumps free plastic bags

China’s move last month to charge for plastic bags has now been followed by the iconic UK retailer, Marks & Spencer. Whilst the environmental angle is clearly important, the move also represents a reaction to higher oil prices. Plastic bags are not ‘free’ to retailers, and their cost is now escalating. Restricting this cost, whilst […]

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4 issues driving today’s oil price

Quietly, oil has moved back to the $100/bbl level. This is quite different from January, when it first hit the magic $100/bbl number. Financial players had jumped on the trend from November as crude rose above $80/bbl, and then wanted to ‘get out at the top’. Their thinking was that a US recession would reduce […]

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The law of unintended consequences

There’s an interesting article on Bloomberg, suggesting that the US Fed’s dramatic interest rates reductions are ‘driving Asia’s governments back to controlled economies’. Its argument is that by cutting rates, Bernanke is ‘limiting his Asian counterparts’ ability to curb inflation’. It goes on to argue that Asian banks cannot now raise domestic interest rates to […]

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China exports inflation

China has been a major source of price deflation for the past decade. It is now the world’s leading manufacturer of a whole range of products from microwaves to DVDs. And the rest of the world has benefited from the lower prices that it has provided. But not any more. The attached chart from the […]

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The renminbi keeps rising

I noted last month that China seemed to have changed policy with regard to the renminbi. Since then, its rise versus the US$ has accelerated, as shown in the above chart from Merrill Lynch (ML). Since August, it has been rising at an annualised rate of 13%. ML’s explanation is that the government is having […]

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US housing, China storms hit chemical demand

Andrew Liveris, Dow’s CEO, commented today that Dow now have ‘a total clampdown on costs and capital expenditure’. Whilst other CEO’s told the Financial Times that ‘rising oil prices, sagging consumer confidence and the on-going credit crunch’ are causing them to put in place ‘contingency plans to protect against the expected economic downturn’. Separately, Bill […]

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Winter storms batter China’s economy

On my regular trip to Asia, the major news is the snowstorms battering China. These started on 10 January, and are expected to continue for at least another week. The transportation system seems to have ground to a standstill in many areas as a result. and so essential coal and food supplies are not reaching […]

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