By John Richardson REMEMBER this time last year when a surge in credit availability occurred in China, thanks to the shadow-banking system? This helped support a pick-up in economic activity in the second half of the year, including stronger chemicals and polymers markets. What a difference a year might have made. The People’s Bank of […]
Asian Chemical Connections
China’s Post-New Year Credit Squeeze
In the first of a series of special posts on how China’s lending environment is set to change, we focus on the murky world of shadow banking. We will return to shadow banking, and to other “grey” areas of financing, in later posts in order to assess what role they have played in chemicals and […]
China’s Reform Process Jeopardised
By John Richardson LAST week’s decision by China to give its banks the freedom to compete for borrowers, by removing the floor on lending rates, has been praised by most analysts. “This is one of the biggest steps they could have taken. It tells you something about the trajectory,” Mark Williams, chief economist at Capital […]
China’s Divided Authority
Source: The Economist By John Richardson ONE of the blog’s Indian friends said last week, as he worries about his country’s political failings: “I sometimes wish were more like China, where, when the Politburo says ‘do this’ it is done. “Here we, perhaps, have an excess of democracy. If we want to get a […]
China Shadow Banking Concerns Grow
By John Richardson Is the Chinese financial system on the brink of its equivalent of the US sub-prime crisis? This is a concern we raised last week in this first post, and a second post, on China’s shadow-banking system. This article from the Wall Street Journal provides more evidence of the risks ahead. The chart below shows the […]
China’s Can-Kicking Temptation
By John Richardson THE China bulls will no doubt claim that the shadow-banking system isn’t a systemic risk to the country’s financial system and thus, of course, the world economy and the investment strategy of many chemical companies. They might be right. Or they might be wrong. Assuming they are right is dangerous. “The economic slowdown […]
China’s Shadow Banking Problem
By John Richardson IN the best of all possible worlds, more than a billion people in the emerging markets will become a great deal richer over the next few decades. As a result, they will be able to much more easily afford all of the things made from, or containing, chemicals and polymers – such […]
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