J.D

More Terrible Trade Numbers from China

Part of the problem is that China already has a strong "buy China" policy. Unless your foreign product is a non-agricultural commodity, it's not really welcome in the Chinese market place.

Nice catch on the Ministry of Finance research institute posting. Funny that a currency manipulator would be so careless.

Is There More Trouble Brewing in China?

Growth is slowing, unrest is rising, corruption is rampant, and so-called efforts to combat it are reversing years of reform. Yes, there is trouble brewing.

Would a Trade War Help Solve the Problem of Excess Capacity?

A great article. Thanks for taking a global perspective. All signs seem to be pointing to the unthinkable: that the crisis is actually worse than anticipated.

Protectionism is now a significant threat though it will take time to play out (possibly years). In response to a strong recession, trade barriers will provide a short term boost to domestic production which will (eventually) leave voters with a false sense that things are improving. Global overcapacity is equally worrying as countries will dump on international markets, which will also contribute to protectionism.

What about the prospects for deflation given over-investment in productive capacity caused by the global credit bubble?

Would a Trade War Help Solve the Problem of Excess Capacity?

A great article. Thanks for taking a global perspective. All signs seem to be pointing to the unthinkable: that the crisis is actually worse than anticipated.

Protectionism is now a significant threat though it will take time to play out (possibly years). In response to a strong recession, trade barriers will provide a short term boost to domestic production which will (eventually) leave voters with a false sense that things are improving. Global overcapacity is equally worrying as countries will dump on international markets, which will also contribute to protectionism.

What about the prospects for deflation given over-investment in productive capacity caused by the global credit bubble?

New Rules for Chinese Stock Market Investors

I agree with Egan on "The World is Flat" is a waste of time (unlike The Lexus and the Olive Tree). However, if you're the kind of person who finds the internet novel and exciting or have never left your hometown, then you may enjoy the book.

On Chinese stocks, " fundamental value" is similarly not applicable. How do you value government agencies masquerading as companies trading between themselves? It's not a real market.

New Rules for Chinese Stock Market Investors

I agree with Egan on "The World is Flat" is a waste of time (unlike The Lexus and the Olive Tree). However, if you're the kind of person who finds the internet novel and exciting or have never left your hometown, then you may enjoy the book.

On Chinese stocks, " fundamental value" is similarly not applicable. How do you value government agencies masquerading as companies trading between themselves? It's not a real market.

China: Bears May Get Their Day, But Bulls are Still in Charge

Contrarian investing based on China Daily articles? Very exciting, but more suitable for publication April 1.

China Still Needs Revaluation, but How Much?

A float is the way to go. China's economy is too large and complex to be managed by bureaucrats. A float would positively reinforce development of a real financial system.

China Still Needs Revaluation, but How Much?

A float is the way to go. China's economy is too large and complex to be managed by bureaucrats. A float would positively reinforce development of a real financial system.

Chinese Companies Need Stable Capital

Chinese SOEs generally aren't being privatized, though some non-controlling foreign capital may be welcome. Current Chinese government policies favor the expansion of SOEs.

Chinese Companies Need Stable Capital

China needs to stop regulating spreads for lending and deposit rates if it wishes to develop a real financial sector. In the absence of market discipline, a policy-induced capital shortage at SOEs is a prudent outcome. The normal incentive of the financial system is to lend all it can which promotes massive over-investment. If China's already there, the only solution is years of relative under-performance. That will be tough for China, as the country depends on investment for sustained high GDP growth.

Chinese Companies Need Stable Capital

China needs to stop regulating spreads for lending and deposit rates if it wishes to develop a real financial sector. In the absence of market discipline, a policy-induced capital shortage at SOEs is a prudent outcome. The normal incentive of the financial system is to lend all it can which promotes massive over-investment. If China's already there, the only solution is years of relative under-performance. That will be tough for China, as the country depends on investment for sustained high GDP growth.

Anecdotal Evidence of Risks in China's Banking System

Very interesting. I presume this is what you mean, the "instantaneous forward" inversion is very obvious:
www.ecb.eu/stats/money...

Any downturn will surely reveal numerous skeletons in the Chinese banking system. Was it ever really fixed? davidinchina's scenario looks very likely, and likely to continue irrespective of whatever quotas/controls are put in place as long as its generating a positive current return.

Anecdotal Evidence of Risks in China's Banking System

Very interesting. I presume this is what you mean, the "instantaneous forward" inversion is very obvious:
www.ecb.eu/stats/money...

Any downturn will surely reveal numerous skeletons in the Chinese banking system. Was it ever really fixed? davidinchina's scenario looks very likely, and likely to continue irrespective of whatever quotas/controls are put in place as long as its generating a positive current return.

Chinese Revaluation: Be Careful What You Wish For

I'm not sure why the context for China's FX regime is always whether and when and by how much it should revalue its currency. It's the wrong question. China is a big trading economy and officials don't have the tools or insight to administer such a complex system effectively, as they are now quickly learning. China needs to look at how to float its currency and avoid all the headaches that comes with the existing outdated system.

There's a choice, act now and be lauded for great vision or wait and find that hot money, inflation, and instability eventually force a more disruptive and painful decision.