Money and Finance
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- Crabs & Rim Jobs
We don’t think it is a coincidence that the flaws in Canada’s banking system are being exposed at the same time China’s appetite for natural resources is being suppressed by a glass ceiling on capital misallocation. In fact, while traveling...
- China's Epic Hangover Begins - By Ambrose Evans-pritchard
Found via Mish.China's credit bubble has finally popped. The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC's dream that is at last coming down to earth with a thud. It is hard to obtain good data in China,...
- How Do We Know That China Is Overinvesting? - By Michael Pettis
Of course the question of whether or not China is misallocating capital can be endlessly debated because it is very hard to prove except in retrospect. I would argue that there are several reasons why we should believe that capital has been wasted on...
- Stratfor: China And The Future Of Rare Earth Elements
Interesting the way China came to produce 95% of the global supply of REE. I don’t think they teach the “government subsidizing loans to money-losing operations to create jobs but collapse the price of the commodity and drive away almost all foreign...
- First Eagle: Views On Developing Markets
At First Eagle we are often asked how we view the developing markets. Some prospective investors also wonder about our noticeable lack of exposure to the BRIC countries (Brazil, Russia, India and China). After all, the world’s wealth seems to be created...
Money and Finance
Teenage angst: The implications of China’s slowdown
CHINA, an ancient civilisation, is still in its economic adolescence, a phase marked by growth spurts and mood swings. Other emerging economies endure this awkward period in relative obscurity, attracting only cursory attention. China has no such luck. It has become big before becoming rich, inviting scrutiny typically reserved for mature economies.
China may not be a member of the G7 group of big, rich democracies. But it is already a member of the so-called S5, or Systemic Five, a group of economies subject to extra IMF attention because of their “systemic” significance. China, according to the fund, is the most “central” trading power in the world, based on its extensive trade links to other economies that are themselves tightly interwoven. It is the biggest or second-biggest trading partner for 78 countries. Its appetite for imports, especially the base metals and oil that feed its vast industrial machine, flatters the exports of countries as far afield as Azerbaijan and Angola.
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A hard landing would hobble South Korea and bring Taiwan’s growth to a shuddering halt. But growth in Brazil and Australia would hold up surprisingly well, perhaps because their currencies would fall, absorbing some of the shock. However, these estimates capture only the direct impact of a Chinese slowdown, as transmitted through its trade links. Messrs Ahuja and Nabar point out that stockmarkets around the world would also swoon. And some countries would be hit by indirect effects: Germany, for example, would suffer both a loss of exports to China and to countries that sell a lot to China. Adolescents have an uncanny ability to spoil things for everybody.
- Crabs & Rim Jobs
We don’t think it is a coincidence that the flaws in Canada’s banking system are being exposed at the same time China’s appetite for natural resources is being suppressed by a glass ceiling on capital misallocation. In fact, while traveling...
- China's Epic Hangover Begins - By Ambrose Evans-pritchard
Found via Mish.China's credit bubble has finally popped. The property market is swinging wildly from boom to bust, the cautionary exhibit of a BRIC's dream that is at last coming down to earth with a thud. It is hard to obtain good data in China,...
- How Do We Know That China Is Overinvesting? - By Michael Pettis
Of course the question of whether or not China is misallocating capital can be endlessly debated because it is very hard to prove except in retrospect. I would argue that there are several reasons why we should believe that capital has been wasted on...
- Stratfor: China And The Future Of Rare Earth Elements
Interesting the way China came to produce 95% of the global supply of REE. I don’t think they teach the “government subsidizing loans to money-losing operations to create jobs but collapse the price of the commodity and drive away almost all foreign...
- First Eagle: Views On Developing Markets
At First Eagle we are often asked how we view the developing markets. Some prospective investors also wonder about our noticeable lack of exposure to the BRIC countries (Brazil, Russia, India and China). After all, the world’s wealth seems to be created...