Archive for China Economy

China’s Industrial output grew 5. 7%

According to official statistics the country’s industrial output grew 5.7% in december or 0.3 percentage points faster than the month before.

Light industry is outgrowing heavy industry in these harsh times.

In December 2008, China’s light industry enjoyed an output growth of 8.1 percent year-on-year, which sharply outpaced the 4.7 percent growth of heavy industry.

I think the next line is very intriguing;

In December, state-owned and state-controlled enterprises witnessed an output drop of 0.6 percent, while that of private enterprises went up 16.3 percent, overseas-funded enterprises was up 0.3 percent.

Filed under: Economy, General News, Market News, Trends | , , |No Comments

Stats, Stats, Stats

Lot’s of news out there these days, and since the global crisis is effecting our market too now (expats staying home, bars closed, shops closing everywhere) I think it will be fun (or better depressing) to look at some stats.

Random order, no hierarchy.
Shanghai’s housing prices have taken a significant dip in early ‘09:

Shanghai’s sold square meterage is at a three year low, prices are still way higher than at the time, but inventory does not move.

 

Remember that the RMB is still pegged to the US Dollar, and unfortunately for us, the housing market here is highly depending on currency hedges.
Though the RMB/USD appears stabil at the moment, I believe the bailout will dissolve any resistance left in a few month.
The Shanghai Real Estate Market, like it or not, needs a strong Dollar, or at least Euro, to keep the current levels of rentals.
And more important, enable homebuyers and investors from abroad to pay back their credit here. 

US Treasury:
Looks like there is a downwards trend coming, and I really don’t think china still believes that’s the safest place to put their money.
Who would, right now, in their right state of mind lend the US Government money at 30yrs for 2.2%?
Check here to understand the compound interest behind the first part of the chart.

  a
US Dollar movement and trade volume 

Filed under: Currency, General News, International News, Trends | , , , |No Comments

Manufacturing contract in last four months of ‘08

The recently released ISM Data showed that the manufacturing sector is contracting at a severe and accelerating rate.

It’s one of the lowest readings in the last 60 years. 
In the chart below, above 50 means expansion, below contraction of the sector.

 

WSJ data also clearly showes that all markets, including india and china are following the global downward spiral.

With rising retail bancruptcies in the U.S. and consumers tightening worldwide this seems to be just the beginning of a long road to recovery.

A side thought,
with 700 Billion Dollars (maybe soon 2 Trillion after Obama), the US Dollar will probably take an amazing dive.
The new money (or paper) taking away value from the already existing money.
And with china having their own domestic slowdown (god forbid me say recession) it’s unlikely that they will bail out the dollar.
Seeing their US Treasury Bill investement evaporate into thin air, I find it very possible, that maybe, just maybe, the government will actually begin to get rid of some USD reserves or trade it into some real value.
(Land, Energy, Oil, Alaska…)

They warned many times, that they can’t “invest” forever, and they will at some point stop to do so. 
Hmm, any thoughts?

Filed under: International News, Market News | , , |No Comments

||