A wide gulf separates the two most prominent views regarding China’s future. Faced with slowing economic growth, one side says its leaders will deftly navigate a soft landing, while the other claims it will face an implosion similar to those that befell Japan 20 years ago and the US in 2008. Count GMO, a firm that has built its reputation on its ability to identify a bubble about to pop, in the latter camp. Edward Chancellor, who focuses on...
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European hedge fund managers are betting that China’s once red hot economic growth will cool dramatically in 2012, hitting companies, economies and commodity prices that have been fuelled by the world’s second largest economy in recent years. Managers are taking bets ranging from short positions on equity markets or the currency to buying credit protection on companies that export to China. Others are shorting natural resources stocks in other countries that rely on Chinese...
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There were few signs that US Treasury Secretary Timothy Geithner had any success during his visit to Beijing this month to persuade China to help pressure Tehran over its nuclear program by buying less Iranian oil. “China’s regular demand for energy has nothing to do with the nuclear issue and it should not be affected,” Foreign Ministry spokesman Liu Weimin said Jan. 11, after Mr. Geithner met with top Chinese leaders. China is Iran’s largest oil and gas client, and Beijing has consistently...
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By Thomas Food prices. There is the basic problem with prices that they only say something about what happens on the margin. This is especially true with food. Shortfalls in supply give rise in prices out of proportion to the amount produced. The demand is inflexible: People gotta eat! This gives the consistent problem with agriculture. When prices are high all farmers want to expand production and land prices rise. Farmers invest in land...
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Each year I have done a post discussing the issue of when China will have the world’s largest economy. Lester Thurow says it won’t be until the 22nd century; I say it may have already happened. Just to be clear, there is no “fact of the matter,” just as there is no fact of the matter as to whether China or the US is larger in terms of square miles. It’s what my students...
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This is really bad. NASA has published an image of the pollution haze taking all over the North China Plain. Yes, it’s so bad that you can see it taking over thousands of square miles from space. Things were so bad that visibility dropped to 200 meters. The Chinese capital’s airport had to cancel 43 flights and delayed 80 more. The first image—taken by NASA’s Aqua satellite—shows the situation on January 10. The entire...
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Carson Block of Muddy Waters Research spoke to Bloomberg Television’s Erik Schatzker about his outlook for China. Block said that he is “very much looking for U.S.-listed Chinese companies with which we can go long.” He also said that “the chances are better than 50 percent that we’ll see in the next two to three years.” Full video and transcript below: Block on whether fraud is as...
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On a dark, drizzly November morning, Michael Farmer steps to the pulpit to deliver a stern message to fellow parishioners at St. Helen’s Bishopsgate, an 800-year-old church in the shadow of the LondonMetal Exchange and in the heart of the City, London’s financial district. “We live in a cursed world — cursed by God,” Farmer tells the men and women who fill the church, most of them workers in the financial industry. “We live in...
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We have no doubt that the building is as safe as the high speed train system in China. Description: What can you accomplish in 360 hours? The Chinese sustainable building company, Broad Group, has yet attempted another impossible feat, building a 30-story tall hotel prototype in 360 hours, after building a 15-story building in a week earlier in 2011. You may ask why in a hurry, and is it safe? The statistics in the...
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Why should Americans try to understand what is happening to the Chinese economy? Why would the average American citizen even consider what is happening on the other side of the world even an important subject for discussion? We hear a lot about this issue in the news and in the political debates. Most Americans probably really do not have an accurate understanding of how the Chinese economy has been transformed since 1975. Most people...
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We have heard a lot about China becoming the world’s largest this and that. In 2009, when the world was in recession, China leapfrogged the U.S. to become the world’s largest auto market. In 2010, China overtook Germany as the world’s largest exporter. This year, China is likely to surpass Japan to become the world’s largest luxury goods market. So, it shouldn’t be a surprise when The Economist predicts that China will become the world’s largest importer...
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