The other side of the China debate

Liveris.jpgThere are always two sides to every debate.

Dow Chemical CEO, Andrew Liveris, clearly has a radically different point of view to the blog’s about the likely outlook for China’s demand.

Liveris told analysts in this week’s earnings call that “any indications of high inventories (in China) are likely to be transitory“. As ICB editor Joe Chang reports, he went on to describe China demand as “quite robust“, arguing that:

• “There is some decline in credit growth due to tightening to curb inflation, but the Chinese run a fairly directed economy, so it’s really to avoid the speculative side on property
• “Household savings are still very high and the government’s 5-year plan is to stimulate the domestic sector. So any aberrations of the inventory kind are very short term”
• “They’re spending on infrastructure, energy, the environment, new materials for aerospace and automotive, and that is all very directed
• “In the next five years, they want to spend $1.7 trillion (€1,120bn) in these sectors“.

Liveris concluded that “I don’t think we have a lot to worry about in the short term“.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.


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