Before I talk about the banking system I just want to mention a quick story. After the 18% hike in fuel prices last week I wondered how taxi cabs in the major cities would fare – obviously fuel is a major component of their running costs. My understanding was that they had not been permitted [...]
Inflation? Or stagnation?
Jun 26th, 2008
For most of us the purpose of traveling to a developing country is to get the frisson of authenticity that we can’t get at home, and it annoys us no end when locals don’t play their roles correctly. Last week at my friend’s wedding in Koh Samui I had to listen to a long diatribe [...]
China’s reserves grew $40.3 billion in May
Jun 25th, 2008
I just got back from my one-week trip having taken a very early morning flight, so I am a little too tired to write much for today’s entry, but I couldn’t let pass a media report earlier this afternoon that claims that China’s foreign currency reserves at the end of May reached $1.797 trillion.. Although [...]
There is an interesting, if perhaps predictable, June 17 Bloomberg article by Patricia Lui that discusses China’s holding of US dollar reserves. According to the article: China is adding to its holdings of U.S. assets, data from the U.S. government showed yesterday, easing concern the Asian nation will sell dollar investments. Total holdings of [...]
Is the economy slowing?
Jun 17th, 2008
Much of the focus in China continues to be on the performance of the stock markets. Yesterday the market bounced around both above and below Friday’s close, before ending the day at 2874, up slightly less than 0.2%. That was the first positive day for the SSE Composite in nearly two weeks (after last week’s [...]
Muddling along
Jun 15th, 2008
The CPI numbers released Thursday have created a wide variety of responses among analysts and economists, both inside and outside China. Some are hailing the reduction in CPI as an indication that China may have turned the corner on inflation, whereas others see this as a temporary reduction that will soon reverse as inflation spreads [...]
PPI for May is 8.2%
Jun 10th, 2008
PPI numbers were released today and producer prices are up year on year by 8.2%, which is higher than April’s 8.1% and March’s 8.0%. Coal, steel, and energy price increases drove the jump in PPI. Although everyone expects May’s CPI inflation number, which will be released tomorrow, to be 7.7%, much lower than April’s 8.5%, [...]
Administrative measures trump market measures (for now)
Jun 5th, 2008
In a sign of how worried the authorities are about rising speculative inflows, in a report released yesterday SAFE said it would step up the monitoring of foreign capital inflows. Yesterday I wrote about the policy paralysis that seems to be occurring as different groups within the government have some fairly radically different ideas on [...]
Chinese savings and US deficits
Jun 4th, 2008
I was just sent a very interesting paper by German economist Jorg Bibow of the Levy Economics Institute of Bard College (The International Monetary (Non-)Order and the “Global Capital Flows Paradox”). In it the author considers the “paradox” of high and rising capital flows from developing to developed countries during the past decade. This is [...]
More on speculation and Chinese monetary policy
Jun 3rd, 2008
I try not to do two consecutive blog entries on the same topic, but Kheng very kindly went through the Caijing article on the hot money survey by Deutsche Bank’s Jun Ma, which I wrote about yesterday, and translated a large part of it. This additional information reinforces what I discussed yesterday, suggesting, among other [...]
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