By John Richardson THE Shanghai Composite Index soared to a seven-year high yesterday on the hope that China’s government is about to launch more economic stimulus because of the release of another disappointing HSBC purchasing managers’ index (PMI). Factory orders shrank at their fastest rate in just over a year, according to the preliminary May […]
Asian Chemical Connections
Rudderless Australia Drifts On
By John Richardson THERE used to be two certainties in life that everyone in Australia could depend on. We all know that the first certainty was, and sadly still is, death. But the second certainty was China acting as the “bankroller” of the Australian economy. This has all but vanished since late 2013. The second […]
China’s Latest Interest Rate Cut: The Essential Context
By John Richardson CHINA lowered interest rates for the third time in six months on Sunday in a further attempt to limit the damage caused by economic reforms. The two earlier rate cuts, and February’s reduction in the bank reserve-requirement ratio, were also about limiting the pain resulting from the boldest, most risky set of economic […]
Why The New Belief In Oil-Price Stability Is Wrong
By John Richardson THE new consensus view on oil prices, based on my discussions with many delegate on the side lines of this year’s Asia Petrochemical Industry Conference (APIC) in Seoul, South Korea, seems to run roughly as follows: OK, most of us completely missed the H2 2014 collapse of crude, but never mind, we now […]
China And The Lewis Turning Point: It Is Here
By John Richardson FOR the last four years, my fellow blogger Paul Hodges and I have been consistently arguing that China was about to hit the Lewis Turning Point. This is the point at which any country runs out of surplus migrant labour, after enjoying a manufacturing-led boom resulting from the movement of lots of […]
China To Stop Importing Chemicals As It Exports New Technologies
By John Richardson LAST Friday I discussed how, even without the impact of demographics on demand, it is mathematically impossible to fit one two billion into two billion. Now bear with me for a few minutes. The themes I discussed on Friday are so critically important to how the global chemicals industry measures growth that […]
China’s Long, Hard Struggle To Reform Local Govt Financing
By John Richardson A story that moves financial markets doesn’t have to be true. All that matters is that the narrative convinces enough people for a sufficient period of time to move markets either up or down, thus allowing speculators to make money. And these days, because of high-frequency computer-driven trading, the credibility of any […]
The Chemicals “Recovery”: Seeing Through The Flawed Logic
By John Richardson AROUND 90% or more of the price movements in most chemicals and polymers are tied to crude oil. Add to that the pick-ups in buying than can occur from time to time, based on supply and demand factors specific to particular chemicals markets, and you end up with a devilishly difficult job […]
Do Business On China’s Terms Or Do No Business At All
By John Richardson THE above slide summarises where I think the future opportunities will lie for overseas polyolefins producers in the key China market. This is taken from my recent speech at the ICIS 4th World Polyolefins Conference in Amsterdam. The main chance will not, it simply cannot, lie in providing vast quantities of commodity trade […]
China: Time To Stop Using The 18th Century Spinning Loom
By John Richardson FOR a long while now I have been arguing that China will do “much, much more with much less”. Four years ago, when Paul Hodges and I first outlined the concept of the New Normal, we highlighted how doing more with less in China would profoundly reshape the nature and strength of […]
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