US & Asia: Contrasting economic activity

10 Replies to “US & Asia: Contrasting economic activity”

1. The 53 percent of inbound containers may be a better result than 48 percent if imports for that period were higher. The pure numbers of export containers growth is important.

   1. There is no growth. Overall container traffic, both inbound and outbound is falling.

2. So why is the US stock market nudging old highs?

   1. Activity in North America is increasing — as illustrated by the Fedex breakout — so you would expect the market to be testing previous highs. That said, we are not out of the woods yet. The economy would quickly fall into a deflationary spiral if the fiscal deficit and Fed balance sheet expansion were withdrawn. It is still on life support — and will probably need this for another 5 years. Gives you some idea of the damage caused by the excesses of the last 4 decades.

3. I am not an economist, just an average Australian living in Beijing for more than 5 years. I have observed bridges built to no where, roads with even stoplights that just have a dead end toward an open field. Many buildings on the edge of beijing with no one living in them. It is easy to cast judgement and be negative about this when one looks at it, however, it has been stated that within 15 years over 300 million people will come to these large cities for work and to further their education. They will need house, universities, schools, restaurants, roads, bridges. The chinese are a forward thinking people, from the government to the average family and they never over react. They are calm and patient. As a person living in Australia, I found that we were different. We/our politicians, waited until we needed roads/bridges/ until it was too late. I lived on the gold coast and the roads from Brisbane to the gold coast are always being upgraded. By the time they are upgraded, there is more traffic and its too congested again. This is the way we do things in Australia, a sort of catch up approach. Of course our state governments have to work within a budget, whereas China doesnt have this system. Five years ago, I went to the outskirts of Beijing, the 6th Ring Road. I saw universities/kindergartens, huge buildings and housing projects being built, roads to no where etc, but now 5 years later, the buildings are starting to be occupied, slowly, the universities have open, not the kindergartens yet. There are no restaurants there yet, but there is already the subway. All this within 5 years. So China has a lot of detractors, but please keep an open mind. As they say, dont judge a book by the cover and with every story, there are two sides. Remember the chinese government want to show the world, not in arrogance but with a certain amount of pride, that they are an intelligent, forward thinking people. So please give them a little respect for what they have achieved. Communism is not a perfect system, thats for sure, but neither is democracy. Keep an open mind. Think about alternative reasons for things.

   1. Thank you for the insight Tony.

      The achievements that China has made have been the result of opening up their economy and adopting Capitalism. Compare that to the lack of progress under Communism in the previous 50 years.

      An interesting comparison: China is effectively ruled by a committee of between 7 and 9 senior officials, Switzerland is governed by a similar committee of 7 representing the major political parties. The difference is that in Switzerland they are elected by the broad population, in China you only have a vote if you are a party member. Hopefully we will see a transition to the latter over time. Even if it starts with only one or two elected officials on the committee.

      Australia is caught in a welfare trap. Too much spending on welfare and not enough on infrastructure hinders economic growth. We are following the path of Greece rather than Switzerland or China.

   2. Sorry, but I just cannot get past the moral failings of such a system.

      Once the moral failings are sorted, then we can talk economics. If the society in question is not even close to upholding standard moral values, and/or has no evidence of attempting to, then any example is mute.

      I understand the examples used, but they are mute. Everything is easy if the people have no power.

      I’m not wanting to start an ideological stoush. That’s just the way it is. The Chinese people have no power over their own destiny. We’re not far behind, in our loss of power as a people. We do still have fighting chance though.

4. The largest tonnage of commodities in containers westward across the Pacific is hay; the second latest tonnage is waste paper.

   Graham Cox
   Maritime Traffic Forecasts Ltd

   1. Excellent insight Graham. Do you have actual tonnages or TEUs?

5. growth seems to be at low levels or falling in the US, China, England, Europe and Japan. Stockmarkets have taken off in several places (US and Japan, for instance) while central banks promise more easing and almost zero interest rates. MAybe FEDEX looks healthy but 0.1% US GDP growth in the the 4Q 2012 looks pretty anemic. Investors seem to believe that the central banks can suspend the laws of economics. All we need is a shock, somewhere in the world, to throw us into a global downturn. Sounds almost likely given the state of the middle east, asia and africa. We are all pretty close to a Japanese style downturn.

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