According to the classic Marxist economic theory (which is the mostly taught economics in China), three factors are key for productivity: Capital, Labor and Land. Among them, according to Marx, the most important factor is labor. Following this logic, Continue (继续)
Archive for category Macro China (国际视点)
According to the data from CEIC and JP Morgan, China’s minimum wage has been increased across the country. Among different areas, the minimum wage in Shanghai is the highest, exceeding 1100 RMB per month. To follow are some other Eastern regions such as Zhejiang, Fujian and Guangdong. The minimum wage in the West is relatively lower. Continue (继续)
China’s Share of Global Bulk Cargo has continued to go up since 1995. The share of China increased from about 15% of global bulk volume to more than 30% by 2009. Such is a reflection of the growth of China’s economic strength and growing importance in world cross boarder trade. Continue (继续)
RMB likely to move (人民币汇率要动)
Aug 29
Back in mid June, PBOC announced to de-peg RMB from USD. Since then, RMB did appreciate about 1% by early August but then reverted back near to the prior de-peg level. In summary in the last 2 months, RMB has almost not moved at all against USD.
Does it mean that the so called de-peg is a fake from PBOC? Or is PBOC waiting for a better time to take more aggressive action? My view is that we are likely to see RMB to make bolder move against USD in the next few months.
I have a few observations to support my opinion.
First, Chinese government is sending messages to the public in support of a more flexible exchange rate regime. This message is well reflected from a series of public announcements made by the Deputy Governor of PBOC, Ms Hu Xiaolian. Ms Hu has published five speeches recently to convey the message that Chinese authority has always supported a managed floating exchange rate regime, Continue (继续)
The past ten years can be labeled as the decade of the emerging markets. Based on MSCI World Equity Index, the stock market in emerging markets including China has outperformed that of USA and Japan by far. The best performer is Russian equity market, Continue (继续)
The CEO of Chinatells, Zhijian Wu is being interviewed by Economic Times in India. He gave his views on World equity market and currency market.
中国通总裁最近接受印度经济时代电视台采访，并在采访中发表了自己关于世界经济的看法。
Recently a graph from Wall Street Journal has caught my attention. In the graph (shown above) the author decomposes the components and cost of a typical Blackberry phone and the origin of the components manufacturers. As shown on the graph, none of the key components (those normally claiming a high knowledge content and price) are made in China. Continue (继续)
There is an old saying in China that: it is fine to have little, but it is problematic to distribute unevenly. The Chinese wisdom is powerful in explaining the world that we are living in. According to a study by Bank of America, the labor income as a percentage of GDP in China has continued to decrease despite the fact that total income has increased in the last 20 years. Continue (继续)
According to a survey done by The Associated Press, People from different countries have very different opinions on China. The Press asked the respondents’ view about China on a) Overall; b) economic power. According to their released result, the nationalities that love China most are Pakistanis and Nigerians, followed by Argentinian, Indonesian and Jordanian. The people who give a most negative score to China are Japanese, Turkey, French and German.
根据美联社最近的一项调查，世界各国受访民众对中国的态度大相径庭。比如对中国最欣赏的国民有巴基斯坦人和尼日利亚人。而对中国嗤之以鼻的民众主要来自于日本，德国，法国和土耳其。看来还是第三世界更支持中国。
I have mentioned in a previous article in Business Times that China wants to slow down and China will slow down. Since then I have received some letters from investors asking for advice on how to hedge themselves against such a scenario. In this piece I would discuss some potential solutions.
I would recommend the investors to pay more attention to those developed markets who rely heavily on the growth story in China. The reason is that first it is not easy to short China directly on the capital market. Secondly China might still be fine if the economic growth slows from 10% to 8%. However a two percent loss of growth in some developed markets would make the dramatic change between growth and recession. I think some of the economies are particularly vulnerable to a slowdown in China. One of them is Australia.
Australia is one of the largest beneficiaries of China’s growth phenomenon. Thanks to its large reserve of natural resource, Australia had a commodity boom in the last few years. It is well reflected from the fact that the housing price in Australia only had a minor blip during the financial crisis, which is in sharp contrast to other G7 countries. Also Australia is one of the few developed countries that fared fairly well during the global financial crisis. Continue (继续)
Michael Pettis is a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets. Pettis has taught Finance and Economics at Tsinghua University’s School of Economics and Management and Columbia University’s Graduate School of Business. Pettis has a Blog on Chinese Financial Market which is very popular.
Pettis has offered unique insights on the economic and financial situation of China, thanks to his long living experience in Beijing. Pettis has long held the view that China’s consumption has been artificially suppressed due to government’s policy to keep the interest rate at an excessively low level long below the long term economic growth rate. Such a policy has encouraged business owners to borrow at an artificially low level at the cost of lenders (consumer depositors). Such a structural misalignment impedes China from changing into a more consumption oriented growth model. Continue (继续)
Stephen Green is Head of Greater China research at Standard Chartered Bank in Shanghai. He lives in Shanghai and travels widely around China. Stephen has long been a China Bull, backed up by his living experience in China. Recently Stephen writes a few reports on China Property advising investors that there is no need to over worry the potential crackdown of China property market. According to Stephen, property sector is one of the most important fiscal revenue sources for local governments and they will have a strong incentive to manage the supply of land to prevent over falling of property price. Stephen also believes that China’s economic growth is likely to slow down in the next few years, but still above the growth pace of the developed countries. Continue (继续)
For the last two decades, China’s phenomenal growth has been one of the most critical changes in the world economy. Such a growth was given tags such as ‘wonder’ or ‘miracle’, and boosts the confidence of all Chinese people by the expectation that were China to continue to grow at such pace, it will be sooner rather than later for China to surpass Japan, and eventually USA to become the world’s leading economy.
The growth story is still under its way. For example, China registered one of the worlds’ best growth rates in the second quarter of 2010 (10.3%). Consider that most developed economies are still struggling in the mire of double dip or debt crisis, for such a big and export oriented economy as China to continue to post a double digit growth, it has to be outstanding if not astounding.
From time to time, however, people do pause and think, and start to raise the questions such as: is this what we want? We are living in the worlds’ fastest growing country, so what? Are we really happier than ten years ago? Continue (继续)
China government unleashed the world’s most aggressive stimulus plan in ’09 for 4 trillion RMB. Due to the scale of such a stimulus, the fiscal deficit has grown exponentially to more than 800 billion RMB at one point. Since the beginning of 2010, however, Continue (继续)
According to a latest study from Standard Chartered Bank, China has been slowing down in the direct purchase of US Treasury since January 2010. However, it is likely that China has been purchasing more US treasury through UK and Hongkong. Continue (继续)
The global financial crisis in 08/09 has pushed many scholars and economists to think what is the cause behind the crisis and the measure to address it. One of the most frequently quoted cause is the global imbalance in trade: Continue (继续)
According to the stats from China’s Bureau of Statistics, Shenzhen has the highest urbanization rate in China, equal to 100%. The other cities with a relatively high urbanization rate are Beijing, Shanghai, and Guangzhou. In terms of population, Continue (继续)
What is the real income of a Chinese household? There seems never a clear answer. The National Bureau of Statistics does release the estimate of Chinese household’s income on a national level. However, the figure looks unrealistically low. For example, according to the official f Continue (继续)
The housing price in Shanghai is increasingly unaffordable according to a latest study. The Shanghai housing price affordability index has continued to go up since 2008, reaching almost the high in 2004. An increase in such an index shows Continue (继续)
China’s IT Service Spending has big potential to go up. According to a latest statistic study, China’s IT service spending amounts to only about 0.2% of the nation’s GDP during 2007 to 2009. In contrast, both Japan and USA spend more than 2% of their GDP on IT. Continue (继续)
China government has one of the world’s best balance sheet compared to most other foreign peers. Such a solid fiscal position can be revealed from China government’s debt level. Since 1996, China government’s domestic debt continues to Continue (继续)
China’s housing price might have more potential to go down rather than go up. A review of the relationship between the price of China’s national property price and Chinese real estate companies listed on A share shows such a trend. Continue (继续)
Since the announcement from PBOC to de-peg RMB from USD, the market has been excited about the movement of RMB. In fact, since June 18 when the announcement was made, RMB has appreciated a whopping 0.87% from 6.83 to 6.77 during a Continue (继续)
The recent tightening measure from the central government in the property sector has brought some hope for those who are still short of a flat. Continue (继续)
China’s copper import in May continues to slow down after the country posted a high in March. Overall the import of copper in the first half of 2010 is almost at the similar pace of that in 2009, but much higher than that of 2008. Continue (继续)
Are you a China Bull? (您对中国有信心么)
Is there a bubble in China property (中国房产有泡沫么)
Secret for China's Growth (中国经济增长原因探讨)
1421: the year China discovered the World
China's Environmental Crisis (中国的环境威胁)
China's Unfinished Revolution (未完成的革命)
The Chinese Century (中国世纪)
The State of China Atlas (中华新地图)
To live (活着)
Who will Feed China: Wake Up Call for a Small Planet (谁来养活中国)
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June 09 (六月)
March 10 (三月)
May 10 (五月)
Nov 09 (十一月)
Oct 09 (十月)
Sep 09 (九月)
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Chinatells (主页)