iShares FTSE China 25 Discussion Board http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion http://www.iii.co.uk/icons/logos/uk_logo.gif http://www.iii.co.uk tag:iii.co.uk,2003:tst.9265191 This long article from FTSE Global Markets considers whether China’s yeasty property market will precipitate a hard landing for the country’s economy.

After he goes through a good many numbers and viewpoints, “Probably not” seems to be the author’s answer.


Valuta



Will China’s walls come crumbling down?

Wednesday, 08 February 2012


(1,600 words)
http://www.ftseglobalmarkets.com/index.php?option=com_k2&view=item&id=3091:will-china%E2%80%99s-walls-come-crumbling-down?&Itemid=54


By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9265191&action=detail Wed, 08 Feb 2012 17:04:00 GMT Valuta tag:iii.co.uk,2003:tst.9257888
This article from China News.Net gives an insight into China’s development of science and technology:-

“.... China has adopted a holistic approach and has evolved well thought-out plans and investments in every sector, thereby enabling it to address the entire ‘Ecosystem’

....if China continues to persist with building an expert base, sooner or later top quality indigenous work will begin to emerge from China."


Valuta



Scientists say well thought strategy needed to catch up with China

China News.Net
Monday 6th February, 2012 (ANI)



(600 words)
http://www.chinanews.net/story/203270001/ht/Scientists-say-well-thought-strategy-needed-to-catch-up-with-China



By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9257888&action=detail Tue, 07 Feb 2012 11:43:00 GMT Valuta tag:iii.co.uk,2003:tst.9254992
Here from MarketWatch is a short report on the International Monetary Fund’s latest assessment of China’s GDP 2012 growth prospects.


Valuta



Feb. 6, 2012, 12:39 a.m. EST

IMF cuts China 2012 growth forecast to 8.25%

By Shen Hong

-- IMF cuts forecast for China GDP growth this year to 8.25% from 9.0%

-- IMF says weakening exports will significantly drag on China's growth amid uncertain global environment

-- IMF says China inflation cooling, should finetune monetary conditions, use fiscal response to boost economy

(Adds analysis, more details from IMF report from third paragraph onward.)

SHANGHAI -(MarketWatch)- The International Monetary Fund cut its forecast for China's economic growth this year to 8.25% from 9.0% projected in September, citing the threat of weakening exports amid an uncertain global environment.

In its China Economic Outlook report released Monday, the IMF said China's growth rate, which stood at 9.2% last year, would drop abruptly if the euro zone experienced a sharp recession.

The organization's assessment comes as investors brace themselves for a fresh slew of Chinese economic data, which are expected to show steadily easing inflation but further weakness in the country's export sector.

Despite the expected slowdown, "China has room for a countervailing fiscal response and should use that space" to provide more stimulus to the domestic economy, the IMF said, adding that it expects world's No. 2 economy to gather speed next year and grow at 8.75%.

However, the IMF warned that unlike the CNY4 trillion anti-crisis stimulus in 2008 that produced a worrisome lending binge, Beijing should execute any fresh stimulus through its budget rather than the banking system.

China's inflation has peaked and is coming down to "more comfortable levels," which should allow the authorities to finetune monetary conditions and supply the economy with "modest additional" credit, the IMF said.

Specifically, the Chinese central bank should relax liquidity conditions over the next couple of months via its weekly open market operations, it said. If capital inflows remain subdued, it could also choose to further lower banks' reserve requirement ratio, it added.

Faced with a slowing economy, the People's Bank of China last lowered its reserve requirement ratio--or the minimum amount of money commercial banks must keep in reserve at the central bank--by 0.5 percentage point in December, the first such cut since December 2008.

Commenting on the yuan, the IMF said upward pressure on the currency has diminished recently, with the speed of foreign reserve accumulation also declining due to a smaller trade surplus and higher global risk aversion.

"However, given the current account still has a sizable surplus in U.S. dollars and FDI (foreign direct investment) remains strong, the pace of reserves accumulation should resume this year," it said.

As for China's property sector, a major growth engine, the IMF said Beijing's efforts to cool the sector have been effective, as both price growth and transaction volumes have come down.

In order to prevent a slump in the market, the government could selectively loosen some purchase restrictions for first-time home buyers and lower income groups, as well as accelerate the construction of social housing projects, the IMF said.

However, limits to lending to property should be maintained to protect the financial system from the impact of a housing downturn, it added.


(500 words + graphics + comments)
http://www.marketwatch.com/story/imf-cuts-china-2012-growth-forecast-to-825-2012-02-06
By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9254992&action=detail Mon, 06 Feb 2012 17:49:00 GMT Valuta tag:iii.co.uk,2003:tst.9252520 Michael Buchanan of Goldman Sachs, in this Bloomberg video interview, expects Chinese GDP growth of about 8.6 percent this year.

Valuta


China to Withstand Europe Slowdown, Goldman says

Feb. 6 (Bloomberg) -- Michael Buchanan, chief Asia-Pacific economist at Goldman Sachs Group Inc., talks about the International Monetary Fund's warning on China's vulnerability to Europe's debt crisis. Buchanan, speaking from Hong Kong, also discusses U.S. growth and Indian inflation with Linzie Janis on Bloomberg Television's "Countdown." (Source: Bloomberg)

Video (8.29 mins)
http://www.bloomberg.com/video/85758210/


By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9252520&action=detail Mon, 06 Feb 2012 09:46:00 GMT Valuta tag:iii.co.uk,2003:tst.9250076

Some advocates argue that argue that property taxes could ease two of China’s biggest economic problems: property speculation and local government debt. This article in The Economist examines the issues.


Valuta


Taxing China

Pay and play

One year on, China’s most-hyped tax is still mostly hype

Feb 4th 2012 | HONG KONG


(800 words + graphic + comments)
http://www.economist.com/node/21546040
By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9250076&action=detail Sun, 05 Feb 2012 12:00:00 GMT Valuta tag:iii.co.uk,2003:tst.9238961 The planned stock market debut of Facebook, with eye-watering multiples and instant multi-billion dollar fortunes for its co-founders, is front-page news.

“Facebook exists to make the world more open and connected, and not just to build a company,” the 27-year-old chief executive Mark Zuckerberg wrote in a letter to investors in the filing.

What are Facebook’s prospects in China? Think of the China Market as a `walled garden' says Gary Rieschel in this five-minute Bloomberg video.

Valuta


China Market `Walled Garden' for Facebook

Feb. 2 (Bloomberg) -- Gary Rieschel, founder and managing director of Shanghai-based Qiming Venture Partners, talks about Facebook Inc.'s planned initial public offering and the social-networking website's business prospects for the China market. Facebook filed to raise $5 billion in what would be the largest Internet IPO on record. Rieschel speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Video (5.08 mins)
http://www.bloomberg.com/video/85432552/
By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9238961&action=detail Thu, 02 Feb 2012 10:05:00 GMT Valuta tag:iii.co.uk,2003:tst.9192014 The Economist this week has a special report focusing on what it calls ‘state capitalism’:-

"The crisis of liberal capitalism has been rendered more serious by the rise of a potent alternative: state capitalism, which tries to meld the powers of the state with the powers of capitalism. It depends on government to pick winners and promote economic growth."

The review focuses on the new state capitalism of the emerging world rather than the old state capitalism in Europe, because (says the author) that reflects the future rather than the past. However, the trend raises some tricky questions about the global economic system.

FXC companies would be exemplars of this new state capitalism.

This, the first of seven articles, gives an overview of the issues.


Valuta



Special report: State capitalism

The visible hand

The crisis of Western liberal capitalism has coincided with the rise of a powerful new form of state capitalism in emerging markets, says Adrian Wooldridge

Jan 21st 2012 | from the print edition



(1,600 words + graphics + comments)
http://www.economist.com/node/21542931


RELATED ARTICLES (accessible via the link above):-

In this special report
• »The visible hand [See above]
• Something old, something new
• New masters of the universe
• Theme and variations
• Mixed bag
• The world in their hands
• And the winner is…

By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9192014&action=detail Sat, 21 Jan 2012 12:33:00 GMT Valuta tag:iii.co.uk,2003:tst.9189067
This MarketWatch article has a cautionary tale about the ‘third wave’ of Chinese companies to be listed in the USA. Those followed the ‘first wave’ of state-owned enterprises (SOEs) in the 1990s and the ‘second wave’ blue chip stocks.

Many of the third wave were small Chinese companies which were tarted up and touted by their Wall Street shepherds, to feed a market for initial public offerings (IPOs) from a public hungry for ‘hot’ Chinese stocks. But many such firms were flaky, unfit for IPO and dud investments.

This tale IMO echoes the caution of people like Aberdeen’s Asia MD Hugh Young about investing in Chinese private companies without getting to know them thoroughly over time.

The large SOEs that FXC holds are enough direct exposure to China for my risk appetite at present.


Valuta



Outside the Box Jan. 20, 2012, 12:01 a.m. EST

China’s stock bubble was made in the U.S.A.

Commentary: Eager investors bought first and asked questions too late
By Junheng Li

NEW YORK (MarketWatch) — When a hot investment theme feeds on investor greed, ignorance and laziness — and is further inflated by unscrupulous, opportunistic investment banks — ugly things tend to happen, as U.S. investors in Chinese stocks are learning.


Junheng Li is the founder and an equity analyst of JL Warren Capital LLC, an independent equity research firm.

(1,400 words + graphics + comments)
http://www.marketwatch.com/story/chinas-stock-bubble-was-made-in-the-usa-2012-01-20?pagenumber=2
By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9189067&action=detail Fri, 20 Jan 2012 14:18:00 GMT Valuta tag:iii.co.uk,2003:tst.9182901 The Chinese government and communist party mouthpiece Xinhua has this upbeat take on yesterday’s Global Economic Prospects (GEP) 2012 report from the World Bank.


Valuta


Chinese economy heads for soft landing in 2012 with room for fiscal stimulus: WB chief economist

English.news.cn 2012-01-18 18:24:15


BEIJING, Jan. 18 (Xinhua) -- China's economy can achieve a soft landing in 2012 despite a global economic slowdown, World Bank chief economist Justin Lin said Wednesday.

China's massive foreign exchange reserves will help the world's second-largest economy shrug off external pressures and maintain a growth rate above 8 percent this year, Lin said at a press conference on the global economic outlook.

As official data show that the government's fiscal deficit is equivalent to about 25 percent of its gross domestic product, China has "lots of room" for a stimulative fiscal policy to stabilize its economy and maintain rapid growth, due to its low debt levels, Lin said.

According to data from the National Bureau of Statistics on Tuesday, China's GDP rose 9.2 percent year-on-year in 2011 to reach 47.16 trillion yuan (7.26 trillion U.S. dollars), with a projected fiscal deficit of 900 billion yuan.

To stimulate its domestic demand, China can rely on either investment or consumption, although the key will be to increase incomes, said Lin, who is also the World Bank's senior vice president for development economics.

"Judging from official data, the proportion of consumption in China's GDP is relatively low and still has room for improvement," Lin said, adding that China should learn a lesson from overspending in Europe and the United States.

In its "Global Economic Prospects 2012" report, the World Bank projected China's economy to expand 8.4 percent in 2012 and 8.3 percent in 2013, warning developing countries to prepare for further downside risks, as eurozone debt problems and weakening growth in several emerging economies are dimming global growth prospects.

Global growth will be around 2.5 percent and 3.1 percent for 2012 and 2013, respectively, according to the World Bank report.

"Developing countries need to evaluate their vulnerabilities and prepare for further shocks while there is still time," Lin said.

Developing countries have less fiscal and monetary space for remedial measures than they did in 2008 and 2009. As a result, their ability to respond may be constrained if international finance dries up and global conditions deteriorate sharply, Lin said.

To prepare for that possibility, Hans Timmer, director of development prospects at the World Bank, said developing countries should pre-finance budget deficits, prioritize spending on social safety nets and infrastructure and stress-test domestic banks.

After expanding by 9.7 percent in 2010, the regional GDP in the East Asia and Pacific region grew an estimated 8.2 percent in 2011, but growth is projected to ease to 7.8 percent for both 2012 and 2013, according to the World Bank report.


(400 words)
http://news.xinhuanet.com/english/china/2012-01/18/c_131367421.htm


By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9182901&action=detail Thu, 19 Jan 2012 12:23:00 GMT Valuta tag:iii.co.uk,2003:tst.9178712 The World Bank has today issued its Global Economic Prospects (GEP) 2012 and here is the press release (minus the Regional Highlights), with has ample warnings for developing countries.

Valuta


World Bank Projects Global Slowdown, with Developing Countries Impacted


Press Release No:2012/236/DEC

Beijing, January 18, 2012 – Developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, says the World Bank in the newly-released Global Economic Prospects (GEP) 2012.

The Bank has lowered its growth forecast for 2012 to 5.4 percent for developing countries and 1.4 percent for high-income countries (-0.3 percent for the Euro Area), down from its June estimates of 6.2 and 2.7 percent (1.8 percent for the Euro Area), respectively. Global growth is now projected at 2.5 and 3.1 [1] percent for 2012 and 2013, respectively.

Slower growth is already visible in weakening global trade and commodity prices. Global exports of goods and services expanded an estimated 6.6 percent in 2011 (down from 12.4 percent in 2010), and are projected to rise by only 4.7 percent in 2012. Meanwhile, global prices of energy, metals and minerals, and agricultural products are down 10, 25 and 19 percent respectively since peaks in early 2011. Declining commodity prices have contributed to an easing of headline inflation in most developing countries. Although international food prices eased in recent months, down 14 percent from their peak in February 2011, food security for the poorest, including in the Horn of Africa, remains a central concern.

“Developing countries need to evaluate their vulnerabilities and prepare for further shocks, while there is still time,” said Justin Yifu Lin, the World Bank’s Chief Economist and Senior Vice President for Development Economics.

Developing countries have less fiscal and monetary space for remedial measures than they did in 2008/09. As a result, their ability to respond may be constrained if international finance dries up and global conditions deteriorate sharply.

To prepare for that possibility, Hans Timmer, Director of Development Prospects at the World Bank, said: “Developing countries should pre-finance budget deficits, prioritize spending on social safety nets and infrastructure, and stress-test domestic banks.”

While prospects in most low-and middle-income countries remain favorable, the ripple effects of the crisis in high-income countries are being felt worldwide. Already, developing country sovereign spreads have increased 45 basis points on average and gross capital flows to developing countries plunged to $170 billion in the second half of 2011, compared with $309 billion received during the same period in 2010.

“An escalation of the crisis would spare no-one. Developed- and developing-country growth rates could fall by as much or more than in 2008/09” said Andrew Burns, Manager of Global Macroeconomics and lead author of the report. “The importance of contingency planning cannot be stressed enough.”


(400 words)
http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23088473~pagePK:64257043~piPK:437376~theSitePK:4607,00.html By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9178712&action=detail Wed, 18 Jan 2012 15:34:00 GMT Valuta tag:iii.co.uk,2003:tst.9174944 A milestone of sorts.

Valuta


Jan. 17, 2012, 2:50 a.m. EST

China’s urban population bigger than rural

By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) — China’s urban population has exceeded the number of people living in rural areas for the first time, government data showed Tuesday, as millions continue to flock to the nation’s fast-growing cities in search jobs and higher standards of living.

Urban residents totaled 690.79 million at the end of 2011, accounting for 51.27% of China’s nearly 1.35 billion population, the National Bureau of Statistics said Tuesday.

About 21 million migrants moved to cities during the year, while the number of rural residents fell by 14.56 million to 656.56 million, the statistics bureau said.

Rural workers seeking work or already employed in factory-related positions in towns and cities make up the China’s roughly 221 million migrants.


Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
(150 words)
http://www.marketwatch.com/story/chinas-urban-population-bigger-than-rural-2012-01-17?dist=countdown



By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9174944&action=detail Tue, 17 Jan 2012 20:40:00 GMT Valuta tag:iii.co.uk,2003:tst.9171928
Jonathan Fenby, MD of the China Team at the research service, Trusted Sources, in this Bloomberg video interview, discusses the latest China growth figures and points out that the figures are in line with the country’s targets.

In the short term, China faces headwinds from Europe, whereas its aim to increase consumption to 60 percent is a five year plan.

He does not expect a property crash, but a decline of about 15 pct in real estate prices.

The important figure yet to come is the loan quota, as credit in China is controlled administratively; he expects China to the lift loan quota by 1 trillion yuan, which will produce a lift in time for the Chinese communist party leadership changes to be announced in October.

He does not expect the forthcoming change of China’s leadership to make much short-term difference to policies, as all are signed up to the five-year plan, but there are many major decisions (on land ownership for example) which have been put off for several years.


Valuta



China to Lift Loan Quotas by 1 Trillion Yuan

Jan. 17 (Bloomberg) -- Jonathan Fenby, head of China research at Trusted Sources, talks about the outlook for China's economy and monetary policy. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)

Video (5.00 mins)
http://www.bloomberg.com/video/84374234/

~

Trusted Sources
http://www.trustedsources.co.uk/

~
Jonathan Fenby
From Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/Jonathan_Fenby
By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9171928&action=detail Tue, 17 Jan 2012 11:20:00 GMT Valuta tag:iii.co.uk,2003:tst.9171668
China's economic growth slowed in the final quarter of 2011 to 8.9%, its lowest rate in two-and-a-half years as US and European demand fell and Beijing combated inflation, the UK Press Association reports. "Today's outcome seems to confirm a 'soft landing' scenario," said Frances Cheung, of Credit Agricole CIB in Hong Kong.

Valuta


China's growth slows at end of 2011

(UKPA) – 6 hours ago


Copyright © 2012 The Press Association. All rights reserved.
(400 words)
http://www.google.com/hostednews/ukpress/article/ALeqM5gyaWasJcRvSRymt_hAMsvRwRdsAA?docId=N1026151326773375791A


By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9171668&action=detail Tue, 17 Jan 2012 10:35:00 GMT Valuta tag:iii.co.uk,2003:tst.9166527 Over the past couple of years I have perceived that – alas – China has been running rings around the west (economically and strategically) and we offer no effective response, either in terms of restructuring at home or challenging China abroad.

The Polish-American political scientist, geostrategist statesman and former US National Security Advisor Zbigniew Brzezinski echoes that downbeat viewpoint in his latest book and in this ‘Lunch with the FT’ feature at the weekend.

Here are four telling extracts:-

+++

“.... Brzezinski’s new book – Strategic Vision: America and the Crisis of Global Power..... offers a bracing portrait of a “receding west” with one half, Europe, turning into a “comfortable retirement home”, and the other, the US, beset by relative economic decline and a dysfunctional politics. In this rapidly changing new world, America’s growing “strategic isolation” is matched only by China’s “strategic patience” in a challenge likely to strain the electoral horizons of US policymakers.”

“We [Americans] are too obsessed with today,” Brzezinski continues. “If we slide into a pattern of just thinking about today, we’ll end up reacting to yesterday instead of shaping something more constructive in the world.” By contrast, he says, the Chinese are thinking decades ahead.

Brzezinski quotes a senior Chinese official who reportedly said of America: “Please don’t decline too quickly”. He then lampoons the standard American candidate’s response to any talk of decline, which is simply to assert that America’s greatness will return if only people would believe in it.

We return to the subject of ignorance, which Brzezinski lists as one of America’s six “key vulnerabilities” in his book alongside “mounting debt’, a “flawed financial system”, “decaying national infrastructure”, “widening income inequality”, and “increasingly gridlocked politics”. He contrasts the level of knowledge of Chinese policymakers with that of their American counterparts.....

+++

I also include an extract from an article by Prof Brzezinski from the current issue of the journal Foreign Affairs, setting out what he considers the west should do. His vision is clearly geostrategic, long-term and vaultingly ambitious. Somehow, I find it hard to see the current crop of bickering US politicians rising to the challenge.


Valuta





Lunch with the FT

January 13, 2012 9:48 pm

Lunch with the FT: Zbigniew Brzezinski

By Edward Luce

The former US security adviser tells why he is worried about Barack Obama and China – and reveals a ‘visceral contempt’ for Tony Blair



‘Strategic Vision: America and the Crisis of Global Power’ (Basic Books) is published on January 24 in the US and next month in the UK

Edward Luce is the FT’s chief US commentator
.......................................................................

BRZEZINSKI IN BRIEF: From Warsaw to the West Wing.....

Copyright The Financial Times Limited 2012.

(2,300 words + graphics + comments)
http://www.ft.com/cms/s/2/4d03c5f6-3ac1-11e1-a756-00144feabdc0.html#axzz1iLGlsNI8

~

Zbigniew Brzezinski
From Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/Zbigniew_Brzezinski

~

Balancing the East, Upgrading the West
U.S. Grand Strategy in an Age of Upheaval

By Zbigniew Brzezinski
January/February 2012
Article Summary and Author Biography


Sign-up for free weekly updates from ForeignAffairs.com.


(300 words)
http://www.foreignaffairs.com/articles/136754/zbigniew-brzezinski/balancing-the-east-upgrading-the-west

By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9166527&action=detail Mon, 16 Jan 2012 10:52:00 GMT Valuta tag:iii.co.uk,2003:tst.9158332 Patrick Siewert of Carlyle, in a Bloomberg interview and studio discussion, lauds his company’s investment record and gives several insights into private equity’s role in Asia.
In China, Mr Siewert sees growth in domestic consumption and wealth trickling down.

“Fear, uncertainty and doubt” are to the forefront in markets at present, he says repeatedly.

Given especially the anxiety around about the USA and especially the Eurozone – whose banks have had 700 billion euros from the RCB in the past couple of months, I found Mr Siewert’s short-term (next few months) “Fud” assessment more convincing than Michael Gayed’s pitch: “The China bull returns.”


Valuta


China's Investment Environment `Evolving'

Jan. 13 (Bloomberg) -- Patrick Siewert, managing director for Asia at Washington-based private-equity firm Carlyle Group, talks about China's economy and financial market. He also discusses Europe's sovereign debt crisis, Taiwan's presidential election and Carlyle's growth strategy. He speaks with Susan Li, Rishaad Salamat, Zeb Eckert and John Dawson on Bloomberg Television's "Asia Edge." (Source: Bloomberg)

Video (12.50 mins)
http://www.bloomberg.com/video/84203350/

~

Carlyle Group
From Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/Carlyle_Group
By Valuta ]]> http://www.iii.co.uk/investment/detail?code=cotn:FXC.L&display=discussion&id=9158332&action=detail Fri, 13 Jan 2012 12:04:00 GMT Valuta