China Archives - Page 14 of 15 - the patient investor %

June 10, 2012

Authoritarian Rulers Get Subtler: Putin, Chavez, China's Chiefs – WSJ.com

WILLIAM J. DOBSON: A handful of retrograde, old-school dictatorships have managed to limp into the 21st century. They are the North Koreas, Turkmenistans and Equatorial Guineas of the world. But they represent dictatorship’s past….

Today’s smarter dictators, by contrast, understand that in a globalized world, the more brutal forms of intimidation—mass arrests, firing squads, violent crackdowns—are best replaced with more subtle forms of coercion.

Rather than arrest members of human-rights groups, Russia’s Vladimir Putin deploys tax collectors or health inspectors to shut down dissident groups. In Venezuela, Hugo Chávez ensures that laws are written broadly and then uses them like a scalpel to target groups that he deems a threat….

via Authoritarian Rulers Get Subtler: Putin, Chavez, China's Chiefs – WSJ.com.

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.

May 31, 2012

EconoMonitor » U.S.-China Trade War in the Offing?

China wants to develop what it sees as key industries by giving Chinese companies a leg up in both the Chinese and global market. Its trading partners don’t want to see their firms placed at a disadvantage, and in several cases have challenged Chinese policies. China is challenging them right back, arguing that those countries do the same thing, and that people who live in protectionist glass houses shouldn’t throw stones. If they do, China can match them “tit for tat.” (A similar battle involving cross-accusations and threats between the EU and China began unfolding this week — you can read about it here).

There’s a critical difference, though, between China and its trade partners. They all may both have policies that can be called protectionist, but they come from different starting points. In the U.S., trade restrictions and subsidies tend to be the exception to the rule, and when they do occur, are usually transparent. There’s a public approval process and an overt policy that can be challenged at WTO. In China, restrictions and subsidies are pervasive, due to the large state role in the economy, and often hard to pin down.

via EconoMonitor : EconoMonitor » U.S.-China Trade War in the Offing?.

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.

May 20, 2012

Chinese economics: Is iron ore demand real?

Reuters video: Nicholas Zhu, ANZ Bank head of macro-economic data Asia, examines iron ore stockpiles at Qingdao port.

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Hat tip to Houses and Holes

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.

May 16, 2012

FedEx CEO on China's Effect on Global Market – WSJ Online

FedEx CEO Frederick W. Smith talks about how exports to China remain stagnant given China’s recent protectionist policies and its focus on “indigenous innovation.” He speaks with WSJ’s Alan Murray at Viewpoints West.

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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 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

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 26, 2012

ASX 200 response

Australia’s ASX 200 opened with a strong blue candle on the hourly chart but is now retracing to find support. Respect of short-term support at 4290 would suggest follow-through to 4320, while failure would test medium-term support at 4240/4250.

ASX 200 Index

Breakout above 4320 would indicate another test of 4400. Though we are unlikely to see a primary up-trend until China signals that it has formed a bottom.

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 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

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.

March 5, 2012

China’s growth model running out of steam – FT.com

For the first time in eight years, the Chinese government’s annual growth target has been lowered, to 7.5 per cent GDP growth for all of 2012…..

The new number represents Beijing’s recognition that the investment-driven, export-dependent growth model that has propelled it from an impoverished backwater to the world’s second-largest economy in just three decades is running out of steam……

The goal is to shift growth away from investment in polluting, energy-intensive, unsustainable industries and towards domestic consumption, particularly of services and “green goods”, such as energy-efficient vehicles and environmentally friendly building materials.

“We will move faster to set up a permanent mechanism for boosting consumption,” Wen Jiabao, the premier, said at the opening session of China’s rubber stamp parliament on Monday. “We will vigorously adjust income distribution, increase the incomes of low- and middle-income groups and enhance people’s ability to consume.”

via China’s growth model running out of steam – FT.com.

Comment:~ The trap China faces is that raising wages in order to promote domestic consumption will reduce competitiveness in export markets and harm its current export-driven growth model. Not only are exports likely to fall but, with a high propensity to save, there is no guarantee that Chinese consumption will rise as fast as wages.