Growth in reserves continues to astonish. Yesterday the NDRC announced that reserves had hit $1.455 trillion by the end of October. This means they were up $21 billion for the month of October, after rising by $136 billion in the first quarter, $130 billion in the second quarter, and $101 billion in the third quarter, …
Read More…Archive for November, 2007
Why IPO prices should surge, and what happens when they don’t
After many days of strength, as of noon today the RMB declined by 0.15%, to 7.3949 to the dollar. Is this simply a random event or are the Chinese financial authorities warning European officials to stop pushing on the RMB front? If it is the latter, it is likely to be a wasted warning. …
Read More…Europeans in China
The timing of the various European meetings in China with my own office move has made it hard for me to keep up my blog, but nonetheless the world hasn’t stopped providing interesting things to talk about. As we all expected, President Sarkozy’s visit included a call for accelerated RMB appreciation – he asked for …
Read More…Hot money coming and going
How much money has been flowing illegally from the mainland to Hong Kong? No one really knows, of course, but there has been an awful lot of noise about the subject recently, culminating in the decision last week by the Shenzhen branch of the PBoC (and Wen Jiabao’s subsequent reversing of the decision) to limit …
Read More…China is selling dollars! (Again? Don’t count on it.)
I realize that this is old news, but I have been traveling for the past four days and so was not able to keep up with my blog very well. Nonetheless I did want to return to Premier Wen’s comments earlier this week about the difficulty China is having in managing its reserves given the …
Read More…Can export crisis lead to internal development?
I was taken to task in my previous posting for having hurried over the idea that China might respond to a US and global slowdown by exporting unemployment to its neighbors, but I agree that it is a real possibility and even likely to happen. In fact if China is locked into an overproduction cycle, …
Read More…Cap on bank deposit withdrawals in Shenzhen
Finally we have a piece of somewhat good news. Industrial production was up only 17.9% year on year in October, down substantially from September’s 18.9% year-on-year rise. Not only is this well below last month’s number, it is also well below expectations, which were for an 18.3-18.5% rise. But we shouldn’t get too excited …
Read More…US slowdown and Chinese investment
Two related stories in today’s Financial Times point out one of the most worrying economic risks facing the world today. The first is a report by China’s National Bureau of Statistics that fixed asset investment (FAI) in urban areas was up 26.9% (to RMB 8.9 trillion) during the first 10 months of the year compared …
Read More…October CPI inflation rose to 6.5%
Finally the numbers are in. China’s CPI was up 6.5% in October, up from 6.2% in September. This matches CPI inflation for August and, with that exception, is the highest monthly CPI inflation number since the 7.0% recorded in December 1996. On the one hand October inflation slightly exceeded the consensus forecast of 6.3-6.4%, …
Read More…Minimum reserve requirement and trade surplus are up (again)
As was widely anticipated, on Saturday the PBoC raised the minimum reserve requirement for Chinese banks by 50 basis points to 13.5%. This is the ninth increase this year and I think at current levels the minimum reserve requirement is the highest it has even been in PRC history. This increase is expected to take …
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