By John Richardson THE above chart further illustrates the dilemma confronting China, which, despite the often-discussed and wrongly interpreted growth in its domestic consumption, still depends on exports for about a quarter of its GDP. Based on Bank of International Settlements (BIS) data, and compiled by the Federal Reserve Bank of St Louis, the chart […]
Asian Chemical Connections
China Exports: Whatever It Takes To Boost Volumes
By John Richardson HERE is a reminder of some key facts about the Chinese economy: Investment, in the form of local real estate, infrastructure and industrial capacity accounts for around 50% of the country’s GDP. China’s total investment levels are 10-15% of GDP higher than comparable countries, such as Japan and South Korea, when they […]
China Capacity Closures? Stop Whistling In The Dark
By John Richardson Measured in US dollars, the price of US imports from China has risen just by 4% over the last ten years, but measured in Yuan, it has actually fallen by no less than 20% (see our above chart). What does this tell us? It tells us that: China, following its accession to […]
China: Don’t Get Caught Naked
By John Richardson THAT’S it then, the evidence is in that the September surge in China’s exports was, indeed, as I thought, substantially down to fake invoicing. “The gap between China’s reported exports to Hong Kong and the territory’s imports from the mainland widened in September to the most this year, suggesting fake export-invoicing is […]
China’s September “Export Boom”. Are You Serious?
By John Richardson WHEN something seems to be so obviously too good to be true, based on lots of contrary evidence, then it usually is. And so here’s the thing: Nobody should take any serious notice of the 15.3% year-on-year rise in September’s exports because all the evidence points to something being very wrong with […]
China’s Bogus Export Boom
By John Richardson CHINA’S strong export growth in July and August is widely viewed as fantastic compensation for weaker growth at home. It also viewed as a sign that the global economy has perhaps, turned a corner, But now it looks as if a substantial proportion of this export boom was, in fact, bogus. Here […]
China Credit Squeeze Further Weakens “Real Demand”
By John Richardson DESPITE the 26% increase in China’s polyethylene (PE) imports in Q1 of this year over the same period in 2013, “real demand” continues to weaken – i.e. the resin bought by end-users to actually make things. The main reason is that China’s determined credit crackdown is having a bigger and bigger effect on […]
China Drives Down Yuan To Protect Jobs
By John Richardson WE first warned in December 2011 that as China’s economic reforms accelerated, Yuan depreciation was a strong possibility. And then in May of last year, we picked up the theme again by again suggesting that as growth in China slowed, Beijing would attempt to support the economy through boosting exports via a […]
China’s Sandwich Generation Revisited
By John Richardson THE sandwich generation in China, those too rich to qualify for social housing but also too poor to pay for ridiculously-overpriced private accommodation in the first-tier cities, is becoming increasingly disillusioned. “We are really tired of claims that inflation is under control, when, in fact, the real inflation numbers are much higher […]
China Faces Poor Peak Manufacturing Season
By John Richardson DEMAND for chemicals and plastics in Asia should be seasonally robust at this stage of the year, when Chinese companies typically prepare for the peak manufacturing season, but this isn’t happening in 2013, warned Paul Satchell, chemicals analyst with Cannacord Genuity. “Goods are manufactured during August and September [the peak season], for […]
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