Tag Archives: China industrial profits rose 28.3% in the first 7 months of 2011

Chinese Markets Go 5 for 7 – Chinese Markets

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Chinese markets were down again in overnight trading for the third day in a row and the last 5 of 7 days.

The Shanghai A shares were down .25%, and the B shares down .14%.

The price of copper, considered one of the leading indicators of industrial demand and the health of China’s manufacturing economy, fell to a 14 month low. Many believe this signals another global recession.

We’re going to need some economic numbers out of China suggesting the impending recession is not as bad as the market is pricing in, and the growing Chinese consumer can pick up any shortfall their export manufacturing might experience.

Here’s a few other news items out of China today: 

  • Hedge fund manager and highly respected Bear and Short sell Jim Chanos estimates China’s debt to GDP ratio is close to 200%- worse than European countries. He says their debt crises will lead to 0% growth in 2012. He believe China will write of 7.5% to 10% of GDP to bad loans.
  • Resource investing news reports electric car demand is strong in Brazil, India, and China- price being the key sticking point.
  • In a move that many see as an “In Your Face” to the US Senate, China has frozen its currency at the current level. By a wide margin the US Senate recently passed a initiative to start crafting a bill that would allow the US to impose big tariffs on the imports of countries who do not allow their currencies to float. This is aimed directly at China. However, China observers point out- the last time China did this, it was three months out in front of a massive stimulus program.

That’s it for today. Perhaps better news tomorrow.

 

Continuing South – China has officially become the world’s largest consumer of energy

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While October has been the “Bear Killer” most of the time since WWII, the China sector continues making new lows as speculation continues that the Chinese economy will go directly from overheated inflation to recession.

Not much news out of China over night. The Shanghai Markets were lower for a 3rd straight day and for 5 out of the last 7 trading sessions. The China markets are flirting with the lowest levels in 2 years.

In Wednesday’s trading, China’s Shanghai A shares were down .25%, and the B shares down .14%.

There’s a couple of news items out of China worth mentioning- Here you go:

  • Premier Wen Jiabao was out urging stronger financial support for China’s small businesses. He’s suggesting some bank credit support, preferential tax treatment, and a relaxing of the standards for non performing loans. Also, he wants banks to avoid “adminstrative intervention”. Now, there’s a concept we could use in the US.
  • China has officially become the world’s largest consumer of energy according to BP’s statistical review world energy. BP reports that in 2010, China used 20.3% of the world’s energy, while the US used 19%.
  • Llloyd Private Banking just completed a survey of private investors which concluded China has now become the most attractive market on balance of risk and return, with the UK, Brazil, and Russia coming in distantly behind.  The Lloyds private banking customers noted they were mostly concerned about the Greek situation.

That’s it for today.

A Sleepy Monday In Late August for China

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  • It’s a sleepy Monday morning on what is traditionally a very slow week in the markets. The news is dominated by Hurricane Irene, and the images out of Vermont are heartbreaking. The rest of the Eastern Seaboard seems to have handled it very well.

  • In Monday trading, the China markets sold off a bit. The Shanghai A shares gave back 1.36%, and the B shares 1.15%. The A shares seem to be trapped in a range between 2640 and 2740 for now.
  • The Wall Street Journal carried an article written by Yukon Huang of the Carnegie Endowment. He suggests China economic numbers are badly skewed by two major factors- the amount of low end household spending that occurs in the “underground” economy in order to avoid taxes, and the government expenditures which, in China, act almost like household expenses. He believes middle class consumption is grossly understated in China.
  • Bank of America economists Lu Ting forecasts China will be tightening bank reserve ratios once again in September. Short term- probably a negative for the markets, but longer term there’s nothing more important than bringing inflation under control.
  • China industrial profits rose 28.3% in the first 7 months of 2011 according to the National Bureau of statistics.
  • The Financial Times reports solid profits from China’s oil industry paves the way for further off shore investment.
  • That’s enough for today. More tomorrow.