China & HK Archives - Page 51 of 61

April 16, 2012

EconoMonitor : Last Days of Rome » How America Builds Its Way Back to Balance

Michael Moran: While China excels at building and even incrementally improving established product lines like GM’s Buicks and countless other Western and Japanese goods manufactured there, it has struggled to innovate. Even in 2010, the year China officially overtook Japan as the world’s second largest economy, no Chinese brand could viably be called a household name in any Asian market, let alone in the wider world. The annual global branding study by the market research firm TNS found in 2010 that, while consumer brands from Denmark, Finland, South Korea, and Switzerland make the top 20, no Chinese product or brand appeared in the top 1,000.

……China can claw its way up the value-added food chain and move its companies beyond the goal of building a better, cheaper Buick and into the high-end, high-margin markets for software, aerospace, robotics, and sophisticated engineering currently dominated by the United States, Europe, and Japan. But the progress to date has been almost impossible to measure, and the country’s substandard educational system, demographic and political challenges, and corruption suggest that this will be more of a Long March than a Great Leap Forward.

via EconoMonitor : Last Days of Rome » How America Builds Its Way Back to Balance.

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

April 16, 2012

Hong Kong & China: Soft Landing

A weekly chart of the Hang Seng Index, with a long tail on last week’s candle, indicates respect of the 20000 support level. A 13-week Twiggs Money Flow trough above the zero line indicates buying pressure. Follow-through above 21000 would indicate an advance to 23000*, confirming the primary up-trend.

Hang Seng Index

* Target calculation: 21.5 + ( 21.5 – 20 ) = 23

Dow Jones Shanghai Index respected support at the 2010 low of 275, indicating that a bottom is forming. Recovery of 63-day Twiggs Momentum above zero would signal a primary up-trend. Breakout above resistance at 310 would confirm, offering an initial target of 345*.

Dow Jones Shanghai Index

* Target calculation: 310 + ( 310 – 275 ) = 345

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

April 1, 2012

China weakens

China’s Shanghai Composite Index broke support at 2300, suggesting continuation of the primary down-trend. Failure of primary support at 2150 would confirm the signal, offering a target of 1800*. A 63-day Twiggs Momentum peak below zero indicates continuation of the primary down-trend.

Shanghai Composite Index

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

Hong Kong’s Hang Seng Index, however, is correcting to test medium-term support at 20000. Recovery of 63-day Twiggs Momentum above zero indicates a primary up-trend. Respect of the rising trendline would confirm, offering an initial target of 23000*.

Hang Seng Index

* Target calculation: 21500 + ( 21500 – 20000 ) = 23000

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 24, 2012

Hong Kong & China correction

Hong Kong’s Hang Seng Index is retracing after a sharp bearish divergence on 21-day Twiggs Money Flow. The longer term 13-week indicator, however, suggests no more than a secondary correction. Breach of the rising trendline, however, would warn that the trend is losing momentum.

Hang Seng Index

* Target calculation: 20000 + ( 20000 – 17500 ) = 22500

The Shanghai Composite Index is retracing to test support at 2300. Failure would indicate continuation of the primary down-trend, while respect would suggest that a base is forming. A further peak below zero on 63-day Twiggs Momentum would signal another decline.

Shanghai Composite Index

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 22, 2012

China Factory Activity Slows – WSJ.com

Data in recent weeks has painted an increasingly gloomy picture of slowing manufacturing, weak exports and tepid bank lending in China. The latest indicator to spook markets came Thursday with the flash HSBC Purchasing Managers’ Index, an initial reading on manufacturing activity in March. The PMI fell to a preliminary reading of 48.1, down from 49.6 in February.

The March PMI reading marks the fifth straight month the index has indicated contraction, signaling extended difficulties for the nation’s manufacturers. A reading below 50 indicates contraction from the previous month, while anything above that indicates growth.

via China Factory Activity Slows – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 22, 2012

Beijing On Edge Amid Coup Rumors – CNBC

Jamil Anderlini: Jon Huntsman, a former Republican presidential hopeful and US ambassador to China who met Mr Bo [Xilai, Communist Party chief of Chongqing] a number of times, said his demise revealed serious rifts among the top leadership of the country.

“The splits in the standing committee [over reform] are as pronounced now as they were during the [1989] Tiananmen Square period,” Mr Huntsman said. “Politics in China is a rough and tumble business. This is an open and public evidence of this and what happens behind the velvet curtain that the world never sees.”

via Beijing On Edge Amid Coup Rumors – Asia Business News – CNBC.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 22, 2012

Bo’s Ides of March « Patrick Chovanec

Patrick Chovanec: Top Party leaders, regardless of political philosophy, had come to dislike Bo [Xilai], not as a person per se — by all accounts, Bo is an extraordinarily charming man — but as a political persona, at least in his Chongqing incarnation, for three reasons:

First, they were offended by his courting of the media and his vigorous self-promotion, which showed a lack of appropriate deference and humility to established power channels and ways of resolving competition. Second, they felt threatened, because few of them were equipped to compete on this basis, if that’s what it took. Third, they were alarmed by Bo’s tactic of “mobilizing the masses” in ways that explicitly invoked the Cultural Revolution, which called up deep-seated fears that populist fervor could be used as a weapon against rival leaders within the Party — as indeed happened during the Cultural Revolution, to horrific results.

via Bo’s Ides of March « Patrick Chovanec.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 20, 2012

BHP: China Iron Ore Demand 'Flattening Out' – WSJ.com

STEPHEN BELL: China’s demand for iron ore is ‘flattening out’, a senior executive at BHP Billiton Ltd. said Tuesday.

Demand growth for the commodity used to make steel will drop “to single digits if it is not already there,” Ian Ashby told a press conference in Perth.

via BHP: China Iron Ore Demand 'Flattening Out' – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 19, 2012

RBA gambles on China – MacroBusiness

Glenn Stevens: Those at home [Australia] see this as well. As consumers, they have responded to the higher exchange rate with record levels of international travel. As producers, however, they also see, with increasing clarity, that the rise in the relative price of natural resources amounts to a global and epochal shift, which carries important implications for economic structure in Australia, as it does everywhere else. Some sectors of the economy will grow in importance as they invest and employ to take advantage of higher prices. Other sectors will get relatively smaller, particularly in the traded sector, as they face relatively lower prices for their products and competition for inputs from the stronger sectors. The exchange rate response to this shift in fundamentals is sending very clearly the signal to shift the industry mix, though this would occur at any exchange rate. The shift in relative prices is a shift in global prices that is more or less invariant to the level of the Australian dollar…..

Delusional Economics: And there is the China gamble laid bare for all to see. It is true that in relative pricing terms Australia’s income has increased but, as the Governor alludes to, the prices we are paying for cheaper imports is a hollowing out of some industries and a corresponding restructuring of the labour force. By not intervening via monetary and/or fiscal policy in the capital flows associated with the commodities boom the government and the RBA have made it clear that a restructure of the economy will be the outcome.

However, as I have pointed out in my analysis of Europe , and Mr Stevens goes on to say later in the speech, structural change is difficult and expensive. By allowing the economy to restructure in this way we are making a one-way bet on China. That is, if we’ve got it wrong on Beijing, we are in seriously deep trouble because there is no Plan B.

via RBA gambles on China – MacroBusiness.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 19, 2012

EconoMonitor » All Feasts Must Come to an End: China’s Debt & Investment Fuelled Growth

Satyajit Das: New lending by Chinese banks in 2009 and 2010 was around 40% of GDP. New bank loans in 2009 and 2010 totalled around $1.1-1.4 trillion, an increase from $740 billion in 2008. Total outstanding loans in the economy have jumped by nearly 50 per cent over the past two years.

Around 90% of this lending was directed towards investment in building, plant, machinery and infrastructure by State Owned Enterprises (“SOE”). In 2010, China allocated over $2.6 trillion to investment expenditure – the highest proportion of GDP of any major economy in the world. According to the World Bank, almost all of China’s growth since 2008 has come from “government influenced expenditure”.

via EconoMonitor : EconoMonitor » All Feasts Must Come to an End: China’s Debt & Investment Fuelled Growth, Part 1.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.