HeF

Is There More Trouble Brewing in China?

I think you're getting your multiplier wrong because you assume that minimum reserve levels in the US and China are similar. Cutting the reserve from 6% to 5% increases the multiplier from 16.7 to 20. Cutting it from 18% to 17% increases it from 5.6 to 5.9. In the end it probably doesn't matter anyway. The contraint on lending now isn't the minimum reserve requirment but rather bank unwillingness to lend, so the multiplier effect will be even lower.

China: Holiday Thoughts on Misunderstanding Data

Thanks for all the great comments. The main points I tried to make in the first part of my piece were: 1) As most of the comments implicitly ackowledge it is not very useful to assume that there is such a thing as "Chinese opinion" when in fact this is a very complex country undergoing huge social transformation and, not surprisingly, there is a very wide range of views including some very mixed feelings about the process of change. Chinese attitudes to China are at least as nuanced and conflicted as American attitudes to the US are, and the view of young people as being dominated by the fen qing (sorry for the typo) is no more accurate than to assume all young Austrians are neo-Nazis just because the neo-Nazis are more visible in the headlines. 2) This complexity and distrust has political and economic implications.

And AWJ, I am not disparaging young people from elite colleges (nor are all my young friends from elite colleges -- I actually deal with a pretty wide group of people here). At Beida, Tsinghua, Renda, Zheda, Fudan and several of the other elite schools at which I taught and lectured I have met lots of very impressive students who have a great deal of idealism and are eager to see Chinese advance in a wide variety of areas, but there is no point assuming that elite students have any more objective view than students from what you unfairly call the "trash" schools. In fact Beida students know that, one way or the otjher, their prospects for advancing in China or going abroad (and all six of the people I spoke to Sunday night said they would not hesitate for a second to emigrate if they could, but it was too difficult for them to do so) are fairly good, and this cannot help but affect their feelings and observations.

By the way I agree with your dismay about Bjork's silly and self-interested behavior. If you are Modern Sky come see me at the Maybe Mars booth, where i spend a lot of time.

The second part of my peice was, I guess, a warning about my own perspectives. I am no more objective than anyone else, but my many years experience in other developing countries leaves me very wary of the claim that economic processes are different in China. I think we need to look at data in China and understand that even when the data is right, it can give us a view that is the opposite of reality because the system has so many moving parts and they react in sometimes contradictory ways to each other.

The Informal China Banking Sector is Growing

I would be surprised if PetroChina didn't have access to bank loans, but remember that until the earthquake (and the January storms before that) there were attempts to cap lending growth, and a lot of companies have been screaming for capital.

China Outlook: Policy Adjustment Risks May Be Growing

Murdy, the comments were quoted in the China Daily. I don't remember the date but it was probably one or two days before my posting. You can read the paper on their website.

China Outlook: Policy Adjustment Risks May Be Growing

Rainman you may be right. The market seems to have done well in the past day or two. I think the thing to watch is April CPI inflation. If it declines, there will be a big sigh of relief. If it rises there will be a lot of anxiety at the government level.