Two days ago my assistant, Peking University undergraduate Oliver Shang, told me very worriedly that the rumors were that PPI was going to come in higher than expected. Yesterday at a news briefing the NDRC said September PPI was up 4.0% year on year, following a 2.6% number in August. According to Dong Tao …
Read More…Archive for October, 2007
Maxi-revaluation being discussed?
An October 24 article on Reuters (“China’s NDRC unaware of yuan revaluation report” has a tantalizing story: A news department official at the National Development and Reform Commission said on Wednesday he was not aware of an in-house report suggesting that China should consider a one-off yuan revaluation of 15-20 percent. Market News International …
Read More…A slowing US won’t fix China’s trade imbalance
Yesterday I saw an article on Bloomberg about the possible impact of a US slowdown on China, and I think that once again we may need to revive the excess-consumption vs. excess-savings debate to figure this one out. Among other things the article said: Weaker demand for exports because of a U.S. slowdown may be …
Read More…The currency regime adds volatility
Several of my students who read my posting “The CIC should not invest in Chinese banks” asked me to elaborate further on the concept of pro-cyclicality and self-reinforcing structures embedded in balance sheets. I thought it might make sense to discuss the idea generally, and then see why it applies especially to China. As …
Read More…Will CITIC buy a stake in Bear Stearns?
My past seems to be closing in on my present. Six years ago, before I decided to move to China (for two years, but who’s counting?), I was a Managing Director at Bear Stearns where I had been working for nearly five years. Today, after hearing rumors for a long time, I find in the …
Read More…The CIC should not invest in Chinese banks
After netting out its existing commitments, the CIC has not $200 billion but closer to $70 billion to play with. It is paying the PBoC $67 billion to take over Central Huijing’s bank shares and is making further investments of $40 billion in the sickly Agricultural Bank of China and $20 billion in the China …
Read More…$23.9 billion surplus in September
China’s trade surplus was $23.9 billion in September, less than August’s $25.0 billion but a lot more than last September’s $15.3 billion. In fact it was the fourth largest monthly trade surplus ever (June’s was the largest, with July and August close behind). The trade surplus year to date is $185.7 billion, handily beating 2006’s …
Read More…The costs of corruption
A recent Carnegie Endowment for International Peace report, authored by Minxin Pei, claims that using a conservative estimate, kickbacks and theft account for about 10 percent of government spending and transactions. This suggests, according to the report, that corruption and bribery costs China at least $86 billion a year. I assume that Pei’s figures …
Read More…Long-term productivity growth
I have just read an interesting piece produced by Mary Amiti and Kevin Stiroh at the Federal Reserve Bank of New York, called “Is the United States Losing it Productivity Advantage?” Although it is not primarily about China, it does lead to some interesting conclusions that may help us to understand long-term growth …
Read More…Difficult decisions postponed?
From talking to friends much more knowledgeable that I am it seems that the 17th CPC Plenum, which will be opened next week, is turning out to be much more fractious than expected, and it is not clear that it will lead to a resolution of factional infighting. There will be no clear victory, apparently, for …
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