Archive for January, 2010

Asia Banks’ once in life opportunity (亚洲纪元的到来)

Jan 31

Posted by Wushu in Equity China (股市风云), Investing China (投资视角), Macro China (国际视点) | No Comments

According to Mr Tony Tan, the deputy chairman of GIS Group, Asian Banks are seeing a ‘once in life’ opportunity to increase or even take over the dominant market share in international finance (See Article from FT). After the Finance Crisis, the world banking industry has gone through a bottom up change between the Western and Asian peers. Asian Banks, especially banks from China, top the list of world’s biggest banks (See graph from Chinatells). Only ten years ago, it was mainly American banks that top the world. Such a change implies a shift of power from West to East, and the world major financial markets are likely to see an increased influence from Asian banks than their Western peers.

根据新加坡政府投资公司副主席最近的发言，亚洲银行可能在未来成为主导世界金融体系的主要力量之一。 Continue (继续)

Beijing to raise minimum wage (最低工资上涨10%)

Jan 28

Posted by Wushu in Macro China (国际视点) | No Comments

Beijing will raise its minimum wage by 10% from the current level of 800 yuan per month on April 1, 2010 (See Article from Global Times). Such a move is welcome by workers and low income wage earners. China’s economy has been one of the fastest growing in the world. However, the income of mass population seems to lag behind the economy growth (See graph from Chinatells). Such a disparity in growth is one of the culprits to result in a higher inequality among the citizens (See Graph from Chinatells). An effort to raise the minimum wage could be contributing to neutralize the widening gap. However, there are also downside to the raise of minimum wage. The first one is that China already showed sign of positive price increment. An increase in wage could worsen the potential inflation growth; Second, an increase wage might make export sector less competitive due to increased cost of production.

北京将在4月1日起将目前800元的最低工资收入线提高10%。其他各省市也纷纷讨论加入提高最低工资的时间表。 Continue (继续)

China Domestic Invesment Geared towards Inland Areas (内地投资增长迅速)

Jan 24

Posted by Wushu in Investing China (投资视角), Macro China (国际视点), Stats China (统计图表) | No Comments

According to a latest study by Goldman Sachs, China’s investment in Inland areas has far outpaced that in the coastal areas. The attached map reveals that the provinces that went through above national average growth are mostly focused in Inland areas. Continue (继续)

Big Change of Global Terran with Powers (大国国土沧海桑田)

Jan 23

Posted by Wushu in Gossip China (八卦天下), Macro China (国际视点), Stats China (统计图表) | No Comments

In the last 500 years, there has been a great change of World Powers in terms of the terran that they control. There are a few notable changes: 1) British Empire used to control the world’s biggest size of terrans, through direct governing or colonial management. Continue (继续)

An increase in Reserve Ratio shows sign of tightening (存款准备金率上调解读)

Jan 23

Posted by Wushu in Investing China (投资视角), Macro China (国际视点), Stats China (统计图表) | No Comments

The Fact that People’s Bank of China chose to raise the reserve ratio instead of the base rate is worth thinking (See Article from China Daily). On one hand it seems an immediate reaction to the potential sign of price increase (See Graph from Chinatells), Continue (继续)

China’s Iron Ore Consumption over High (铁矿石需求全球领先)

Jan 23

Posted by Wushu in Commodity China (商品风暴), Macro China (国际视点), Stats China (统计图表) | No Comments

China’s Iron Ore Consumption is among the world’s highest given China’s income. According to a latest study, Given China’s GDP per capita, China’s Iron Ore consumption of around 1000 Kg per capita makes it one of the highest in the world. Continue (继续)

China is the second most efficient producer of Coal (中国产煤成本低廉)

Jan 21

Posted by Wushu in Commodity China (商品风暴), Macro China (国际视点), Stats China (统计图表) | No Comments

According to a latest estimate, the production cost of coal in China is the second lowest in the world: only slightly higher than that of South Africa. In terms of reserve volume, Indonesia and Australia are the world’s largest with 150 Million Metric Tons each. Continue (继续)

China’s Diesel Production continues the growth (柴油产量逐年递增)

Jan 21

Posted by Wushu in Commodity China (商品风暴), Macro China (国际视点), Stats China (统计图表) | No Comments

China’s Diesel production continues to go up in the recent decade. According to a latest estimate, the annual production increases steadily from 1500000 Barrels per day to about 3000000 Barrels per day in 2011 (estimate). Continue (继续)

China’s Economy Boom comes with Property Bubble (房价随着经济涨)

Jan 21

Posted by Wushu in Macro China (国际视点), Property China (房产透视) | 1 Comment

China’s economy grew a mighty 8.7% in 2009, which tops the world among all the nations (See Article from WSJ). At the same time, the domestic Property price also experienced a hazy year (See Graph from Chinatells). It seems sarcastic that with the economy growing at the fastest rate in the world, more and more people are complaining that they can not afford to have a place to stay. Such phenomenon is particularly apparent in big cities such as Shanghai and Beijing. Also people start to blame the high housing price for some unhealthy social problems, such as the prominence of mistress (Er Nai in Mandarin) as there is no way for young girls to afford an apartment or a car, and the only way for them to own such properties is to become a mistress of someone rich or powerful. Overall, the high housing price has caught the attention of Continue (继续)

China’s Oil Refinery Capacity increases fast (炼油能力成倍增长)

Jan 17

Posted by Wushu in Commodity China (商品风暴), Investing China (投资视角), Stats China (统计图表) | No Comments

China’s oil refinery capacity is likely to increase in a fast pace in the next 5 years. According to the latest estimate, China’s refining capacity exceeded the oil demand for the first time in history in 2009. Continue (继续)

China’s Household put most Asset in House and Cash (房子票子重中之重)

Jan 16

Posted by Wushu in Investing China (投资视角), Macro China (国际视点), Stats China (统计图表) | No Comments

A horizontal comparison of the household Asset portfolio among a few big countries in 2007 reveals that China’s household is heavily vested in Property as their single biggest investment. Continue (继续)

China Property Inventory on downtrend (空房子存货渐少)

Jan 15

Posted by Wushu in Investing China (投资视角), Property China (房产透视), Stats China (统计图表) | No Comments

China’s property market, especially in the big cities, went through some rounds of crazy price move in 2009 (See Article from Chinatells). People attribute the price spike to an over loose monetary policy. Continue (继续)

Gap between Urban and Rural worrying (城乡差距令人担忧)

Jan 15

Posted by Wushu in Macro China (国际视点), Stats China (统计图表) | No Comments

The gap between China’s Urban and Rural area has reached a worrying level. A snapshot of a comparison between the Food Consumption of two areas would give people a rough idea. Continue (继续)

China’s Young Population peaks in 2015 (老龄化2015始现)

Jan 15

Posted by Wushu in Macro China (国际视点), Stats China (统计图表) | No Comments

According to a latest estimate on China’s demographic development, China’s young population (20-29 year old) will reach its peak by 2015. Since 2015 the size of such population will continue to go down year by year. Such a trend has the following implication: Continue (继续)

Google can not take China (谷歌中国屡遭挫折)

Jan 14

Posted by Wushu in Corp China (公司动态), Macro China (国际视点) | No Comments

China is the world’s largest potential market for almost every thing, from baby milk to cars, from computer software to internet service. However, not every company with an intention to make a fortune in China ends up in happiness, despite how successful they are outside China. Google is such an example. Google never had a smooth road in China since its entry. It was tied to an incidence of showing porn related content (See Article from Chinatells), and the CEO of Google China resigned to set up his own fund (See Article from Chinatells). Now Google China is having more headache with a site attack from China and the management seems desperate therefore threatens to quit (See Article from Yahoo). I doubt Google is serious about quiting China as they simply can not afford to lose this market due to strategic and competition reasons, even though currently China only contributes a tiny portion of Google’s global revenue. Continue (继续)

Guangming Group expanding in Australia (光明乳业进军澳洲)

Jan 13

Posted by Wushu in Commodity China (商品风暴), Corp China (公司动态), Investing China (投资视角), Macro China (国际视点) | No Comments

Guangming Group is Shanghai’s No.1 Brand in dairy products. I still remember that I receive a bag of milk with ‘Guangming’ on the face every morning when I was a child. Recently Guangming Group has been tied to a rumor of investing 1.4 Billion USD in Australia’s No.1 Sugar producer: CSR (See Article from Forbes). CSR is in the process of splitting the group into two business segments: property and sugar. Once they spin off the sugar assets, CSR group is believed to achieve a better valuation on the stock market. Guangming Group is one of the Chinese conglomerates that show interest in Australia’s commodity assets, precedented by Aluminum and Iron Ore sector. Rumor says there are other competition such as Cargill, CJ, and British Sugar interested in CSR Sugar.

中国光明集团被传闻有意收购澳大利亚白糖集团CSR。CSR是澳大利亚最大的食用糖生产集团，光明集团以光明牛奶闻名上海。光明集团这次得出手只是中国众多大公司收购澳大利亚大宗商品公司的一部分，之前有其他公司对澳大利亚的铁矿砂和铝矿等资源性企业产生过兴趣。

China Government shows sign of tightening (收紧银根说来就来)

Jan 12

Posted by Wushu in Investing China (投资视角), Macro China (国际视点) | No Comments

There are a few signs recently that suggests that China government might consider tightening the money supply. These signs include: 1) Price Recovery is happening; 2) Export growth is recovering; 3) An export growth plus a price recovery potentially points to inflation. The central bank is particularly sensitive to Price Recovery, and normally they will adjust Bank Reserve Ratio first before touching the base rate. PBOC’s announcement today seems to have confirmed the above logic (See Article from Bloomberg). I believe through such an increase of 50 basis point, the government is trying to send a message to the market that they are aware of the price increase and would take serious actions against potential threat of inflation, before it becomes out of control. Also a by-product of such message is to give a warning to the rampant property market.

中国央行今天宣布提高准备金率0.5%。这个和最近市场所观察到的价格回升有密切关系。 Continue (继续)

Government deposit growth highest in the last decade (政府存款高速增长)

Jan 12

Posted by Wushu in Investing China (投资视角), Macro China (国际视点), Stats China (统计图表) | No Comments

The last decade is a dream decade for China’s economic growth (See Article from Chinatells). However, it is not clear whether the consumer sector benefited as much as the government sector. Some observation might provide indirect hint. Continue (继续)

China’s consumption trends lower (中国消费率持续降低)

Jan 12

Posted by Wushu in Investing China (投资视角), Macro China (国际视点), Stats China (统计图表) | No Comments

China’s GDP growth has been outstanding among the three big economies in East Asia (China, Japan and South Korea). However, it seems that the Chinese consumers’ appetite has not been growing at the same pace as ecnomic growth. Continue (继续)

Hong Kong Stock Exchange on path to go global (港交所的国际化之路)

Jan 12

Posted by Wushu in Equity China (股市风云), Investing China (投资视角), Macro China (国际视点) | No Comments

Hongkong Stock Exchange is the IPO Champion of 2009: bigger than NYSE. At the same time, however, Hongkong stock exchange is under serious threat from Shanghai and Shenzhen stock exchange. To walk out of the competition, HKSE is looking into expanding on an international horizon by attracting more foreign companies to get listed (See Article from Economist). Recently HKSE is working on a potential IPO deal for Rusal – A Russian mining company. The success of Rusal’s IPO is likely to be followed by six to seven other Russian companies to go to the HK bourse. In addition, several German companies have been floated in this year as well.

香港证券交易所高度警惕，时刻保持危机感。由于感觉到上海和深圳证券交易所对中国公司上市的竞争力， Continue (继续)

GDP Components’ contribution: Export volatile, Investment increasing (依赖投资，出口动荡)

Jan 11

Posted by Wushu in Investing China (投资视角), Macro China (国际视点), Stats China (统计图表) | No Comments

The components of China’s GDP growth can be divided into three broad categories: Consumption, Investment and Export. A close review at the growth trend of these factors reveals the following findings: 1) China’s GDP growth starts to be heavily dependent Continue (继续)

Salary not keeping up with GDP Growth (国家富了工资低了)

Jan 11

Posted by Wushu in Macro China (国际视点), Stats China (统计图表) | 1 Comment

It seems that the national Salary level of China has not kept the growth pace of GDP growth. In fact, the salary/GDP ratio continues to go down since early 90s and drops to a low of around 10% in 1998. After 1998, the ratio slightly recovered but still Continue (继续)

China’s low consumption goes with low income (收入低消费也低？)

Jan 11

Posted by Wushu in Investing China (投资视角), Macro China (国际视点), Stats China (统计图表) | No Comments

China’s low consumption ratio has been a focus of academic research (See Article from Chinatells). There are a lot of reasons being offered for such a low level of consumption. However, the economists might have overlooked a fundamental fact: Continue (继续)

China’s Steel Demand on the Rise (钢铁需求继续看好)

Jan 11

Posted by Wushu in Commodity China (商品风暴), Macro China (国际视点) | No Comments

China is world’s largest steel producer and consumer (See Graph from Chinatells). The strong growth of China’s steel demand is likely to continue into 2010. Such a growth prospect makes all the global iron ore producers put a great deal of their attention to China’s market (See Article from WSJ). With the global economy looking likely to walk out of the ’08 Financial crisis, China’s export is perceived to have a potential to grow (See Graph from Chinatells), and therefore the demand of steel gets a lot of bullish sentiment. Hopefuly such a demand growth also improves the negotiation power of China’s steel makers.

中国钢铁需求在全球经济不景气的时候逆境而上，屡创新高。 Continue (继续)

IP and FAI Growth Mixed in December (12月份固定投资和工业生产综述)

Jan 9

Posted by Wushu in Macro China (国际视点), Stats China (统计图表) | No Comments

China’s Industrial production (IP) and Fixed Asset Investment (FAI) showed a mixed picture in December 2009. According to the statistics released by NBS, the IP increased 20% in December, which is slightly higher than that of November. Continue (继续)