Tag Archives: China
De strijd om de rare earth metals
Posted on 20. Apr, 2010 by Heleen.
Deze week in Trends (verschenen op 15/11, pg 110-111), een artikel over de markt van rare earth metals (zeldzame aardmetalen). Een interessant onderwerp met complot-trekjes waar verrassend genoeg zeer weinig aandacht aan wordt besteed. Een korte samenvatting van wat ik in Trends heb gezegd:
Tot voor kort was de markt van zeldzame aardmetalen eerder een nichemarkt. Door de opkomst van groene technologieën zoals windmolens en elektrische wagens, die gebruik maken van die zeldzame aardmetalen, is er een duidelijke groei te merken. Op zich niets uitzonderlijk, ware het niet dat China de markt volledig in handen heeft (95% van de productie). De aardmetalen zijn nochtans wereldwijd aanwezig, concurrenten werden echter door China uit de markt geprijsd. Daarnaast daalt de Chinese export jaarlijks. Doel hiervan is niet het beheersen van de aardmetalenmarkt, wel (en nu komt het) het beheersen van de cleantechmarkt. Voor zij die er aan moesten twijfelen: dat is waar ik mij zorgen over maak. De groene technologieën kunnen niet zonder de aardmetalen, die ze op termijn enkel nog in China zullen vinden, waardoor de productiebedrijven zullen moeten verhuizen. Tegen deze praktijken hebben de VS, Europa en Mexico gezamenlijk een klacht ingediend bij de WTO, al zal dat de situatie niet onmiddellijk veranderen…
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China: diverging trends
Posted on 07. Apr, 2010 by Geert.
Nice charts from the OECD, illustrating the growing importance of China in world GDP on the one hand, and the declining part of China’s population on the other hand.
The reference with 1820 is interesting. It shows that China used to be a major economic power at the start of the industrial revolution.
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Power Play
Posted on 30. Mrt, 2010 by Johan.
Johan Van Overtveldt
De verleiding is groot in Washington om China via protectionisme een stevige loer te draaien. Daar zouden we echter allemaal een zware prijs voor betalen.
Het blijft bang afwachten hoe de conjunctuur de komende maanden verder kantelt. Wat positievere berichten wisselen af met tekenen die wijzen op de reële mogelijkheid van een double dip. Feit blijft evenwel dat de wereld het voorbije anderhalf jaar ontsnapte aan een herhaling van (of een variant op) de Grote Depressie van de jaren 1930. Een krimp van de economie met, pakweg, één derde en een werkloosheidsgraad van 25%, zo groot is de miserie in de voorbije periode inderdaad lang niet geworden.
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China: the imperative to change
Posted on 02. Feb, 2010 by Geert.
The OECD released its bi-annual report on China.
OECD reports are in general not the most exciting stuff to read. It is never ground breaking, and it will not win a creativity report. But that’s of course not the intention anyway. The OECD gives a rather fair view of the current state of the Chinese economy, and provides data and charts that are always a pleasure to view.
I enjoyed the chart on the evolution of the shares in world manufacturing for instance (see below), although the word ‘enjoy’ is somewhat ironical. China is powering ahead, and has surpassed the US, Japan and Germany in a very short period.
The question is now how to deal with the situation. [...]
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“Een Amerikaans bedrijf kan in China geen zaken doen”
Posted on 20. Jan, 2010 by Geert.
…dat is de forse ondertitel van de column van Dominique Deckmyn in de Standaard. Het opiniestuk van deze IT-specialist gaat over de problemen van Google in China, waarover we al schreven op deze blog. De dreiging om zich terug te trekken uit China, komt na een reeks cyberaanvallen op de sites van Google. Tenminste, Google gebruikt dit als hoofdargument voor zijn actie. Ook op onze blog stelden we al dat andere redenen ook kunnen meespelen, namelijk het gebrek aan succes in China. Deckmyn ziet dit ook als doorslaggevende reden: [...]
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Zonnig Vlaanderen
Posted on 22. Dec, 2009 by Heleen.
Zonne-energie is in Vlaanderen bezig aan een steile opmars, mee dankzij de massale subsidies. De subsidies zijn essentieel geweest voor deze doorbraak, al kan je de vraag stellen of de overheid niet wat meer de nadruk had moeten leggen op minder sexy maar ook minder dure oplossingen zoals energie-efficientie en isolatie.
Los van deze discussie, wat interessante zonne-energie-weetjes uit De Standaard:
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Jonathan Holslag over Kopenhagen
Posted on 21. Dec, 2009 by Geert.
Jonathan Holslag is Chinakenner, en een topper in zijn gebied (Head of Research of the Brussels Institute of Contemporary China Studies (BICCS)). Hij schreef een rapport over de klimaatwijziging en China: ‘Climate for Cooperation The EU, China and Climate Change’. [...]
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China haalt de VS in
Posted on 20. Aug, 2009 by Geert.
Voor mij is dit dé grafiek van de maand !
Door de krimpende autoverkoop in de VS en de stimuli in China, is een – om in de beeldspraak te blijven – een inhaalbeweging gebeurd.
De autoverkopen in China zijn in de afgelopen maand in de slipstream van de Amerikaanse gekomen.
Meer van deze knappe grafieken, in het rapport van Pimco over emerging markets.
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Global imbalances have grown further
Posted on 06. Aug, 2009 by Geert.
The US think tank Economic Policy Institute has calculated that 83% of US trade deficit (2009 year to date) is on the account of China.
This means that imbalances have further grown. In 2007, only half of the US deficit was related to China.
The necessary “global rebalancing” has not even begun. This is a prerequisite to prevent a new global crisis in the future.
The EPI concludes:
China could do much to reduce this imbalance by revaluing its highly undervalued currency, giving up energy subsidies for exports, and forgoing the dumping of exports in the U.S. markets. China’s huge stimulus program has kept its economy growing at an 8% rate this year, and is able to consume many more U.S. exports
Of course, the US could do more to decrease the trade deficit, by applying a sounder economic policy based on investments and exports, instead of government spending and refuelling consumer credit.
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Het Chinese vergrijzingsprobleem
Posted on 29. Jun, 2009 by Geert.
A mooie grafiek van The Economist, dat het vergrijzingsprobleem van China treffend illustreert.
Merk op dat China niet alleen sterk vergrijst, maar ook een sterke achteruitgang kent van zijn % jongeren.
Geen enkel land in de wereld kent zo’n snelle vergrijzing als China. Het zal wat planning vereisen om dit op te vangen…
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China is nu de grootste autoafzetmarkt in de wereld
Posted on 16. Jun, 2009 by Geert.
Het is wat onopgemerkt aan ons voorbijgegaan. De spectaculaire daling van de autoverkopen in de VS heeft de markt doen krimpen tot een (jaarlijks) volume van ongeveer 10 miljoen wagens (en SUV’s). In China is de autoverkoop sterk gestegen door allerhande stimuli van de overheid: daar is het (jaar)volume nu geklommen tot 12 miljoen stuks.
Op zes maanden tijd is de VS dus van zijn troon gestoten. Dat is indicatief voor de grootte van beide economieën.
Bloomberg over de verkoop van wagens in China
FT over de wereldwijde autoverkopen
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Clean coal and carbon capture and storage: big myths?
Posted on 11. Mei, 2009 by Geert.
An article in the New York Times starts with the huge hunger for energy – and more in particular – coal in China:
China’s frenetic construction of coal-fired power plants has raised worries around the world about the effect on climate change. China now uses more coal than the United States, Europe and Japan combined, making it the world’s largest emitter of gases that are warming the planet.
(WOW: China’s coal consumption = US+Japan+Europe !) [...]
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China buys gold that the IMF and others are selling… (update)
Posted on 24. Apr, 2009 by Geert.
As said in previous posts, I question the intelligence of the US Federal Reserve’s monetary policy. More generally, I think that the Anglo-Saxon economic and financial policy has been a complete failure. The latest ‘aggressive move’ includes the complete explosion of budgetary balances and the willingness to print money ad nauseam.
China has shown some unease with the US monetary and budgetary policy recently. Stefan Karlsson writes on his excellent blog that China has decided to buy more gold:
Recently, the price of gold has been under pressure because of a decision by the IMF to sell off much of its gold reserves. While I believe that most other factors support the bullish case for gold, I also recognize that the bullish scenario is threatened by decisions of the IMF and certain central banks to sell gold.
Now the price of gold increased somewhat on the news that the Chinese seem to have a different attitude towards gold than Western central bankers, as they have announced that they are buying gold. If China and other emerging economies start to buy a lot of gold, then this will cancel out much of the effect of the gold sales of other central banks, and so improve the odds of future gold price increases.
(hat tip: Koen) Naked Capitalism also has a story on the Chinese gold buying. The message is clear. China is divesifying away from the dollar. If the Chinese are losing their faith in the US dollar as a reserve currency, this will have important consequences.
China revealed on Friday that it built up its gold reserves by three quarters since 2003, making it the world’s fifth largest holder of bullion.
The move comes as European central banks continue to sell their gold and the International Monetary Fund has discussed selling some of its bullion reserves.
“This is probably the most significant central bank announcement since the Central Bank of Russia announced at the LBMA gold conference in Johannesburg in 2005 that it wanted to hold 10 per cent of its foreign exchange reserves in gold,” said John Reade of UBS.
Ahead of this month’s G20 meeting in London, China said reliance on the dollar as the world’s reserve currency should be reduced by making greater use of special drawing rights, the synthetic currency run by the International Monetary Fund.
This led to speculation China was considering changing its policy which has seen the majority of its foreign exchange reserves channelled into the US government bond market and other dollar denominated assets.
This has raised the question of whether China plans to increase the proportion of its foreign exchange reserves that it holds in gold and how much it could buy
Naked capitalism gives a nice overview of the chain of events since the start of the crisis from a Chinese perspective:
- The U.S. sub-prime mortgage market implodes, causing Fannie and Freddie to go bust. The Chinese start dumping GSE paper. (27 Aug 2008 post)
- Meanwhile, Tim Geithner was putting his foot in his mouth and telling everyone China was ‘manipulating’ its currency. Vice President Biden had to correct him, but the damage was done and the Chinese went on a rampage, savaging the U.S. at Davos (Geithner: 28 Jan 2009 post ; World Economic Forum: 29 Jan 2009 post)
- Then, in March, the Chinese premier started making the same noises about Treasuries that he had about GSEs earlier (13 Mar 2009 post). Was he bluffing? Marshall Auerback said so at the time. I am a bit more concerned.
- Showing increasing signs that they were not bluffing, the Chinese started avoiding using dollars in transactions in deals with countries like Argentina (31 Mar 2009 post)
- Then, before the G-20 summit this past month, the Chinese start floating the idea that it wants to move to a SDR (special drawing right)-centric world, loosening the U.S. grip on being the world’s reserve currency. Of course, there was the chatter about the Chinese pegging their currency to copper instead of the U.S. dollar. Obviously, they had worked this out with the Russians ahead of time. (1 Apr 2009 post)
- After the summit, the whole lets-not-settle-trade-in-dollars meme continued as the Chinese struck yet more deals to do so (9 Apr 2009 post)
So, here we are, three weeks out from the G-20 and now we learn the Chinese have been buying gold. In my mind, there is no doubt that China is looking to topple he U.S. dollar as the world’s reserve currency. And this will happen over time. The Europeans want it – they are a rival in currency terms. The Asians want it – they want to stick it to an arrogant country which caused great hardship to Asia through the IMF in the Asian Crisis. And the oil exporters like Saudi Arabia, Iran and Venezuela all want it too. It will happen. The question is when and what will happen.
Central banks in the west are selling gold and buying toxic paper from banks, and are printing more money. Central banks in Asia and China in particular are buying gold on the other hand. Now what do you think is the most sensible strategy. Who gets your vote ?
Update: some more details appear on the Chinese gold deals. The Chinese have 1054 Tons of gold. Official data always mentioned 600 Tn of gold.
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Green shoots or traffic jams?
Posted on 14. Apr, 2009 by Geert.
Are banks turning the corner ? Or even better: is the economy turning a corner ? Results of Goldman Sachs seem to feed some optimism, as do some economic indicators. And isn’t the stock market rebounding lately? Aren’t we told that equity markets are the best leading indicators?
Let’s start with Goldman. This bank has been a special case as from the start of the crisis. Nevertheless, it had to use some 10 bn USD from the TARP (rescue fund), and saw it’s stock price drop y 75% top to bottom. All in all, Goldman has been among the best, and has been making the best of the crisis, by shorting subprime, oil and everything that could be shorted, as they saw their client panick across the world. Goldman’s Q1 2009 earnings are probably a challenge for all analysts, and I will not try to make a detailed analysis. Goldman Sachs earned $1.81 billion, or $3.39 a share, in the first quarter as a surge in trading revenue outweighed asset writedowns. The results beat the $1.64 a share estimate of 16 analysts surveyed by Bloomberg. The bank plans to raise $5bn in stock sale in order to pay back TARP funds. If Goldman issues shares at the current price, be sure that they think the bear market rally is not here to stay.
Other US banks are showing “better than expected results” too. According to Nouriel Roubini, they are benefitting from close to zero borrowing costs; from a massive transfer of wealth from savers to borrowers given a dozen different government bailout and subsidy programs for the financial system. And they are not properly provisioning for massive future loan losses. Also they are not properly marking down current losses from loans in delinquency. US banks are using the recent changes by FASB to mark to market to inflate the value of many assets and are using a number of accounting tricks to minimize reported losses and maximize reported earnings.
Finally, the Treasury is using a stress scenario for the stress tests that is rather a benchmark of what the economy is likely to look like in 2009 and 2010. But this scenario is overly optimistic, a true stress scenario would have considered a much more serious economic downturn.
The Baltic freight index is rolling over, a sign that the improvement is not sustainable. We will soon find out whether Chinese economic data are confirming this weakness. The Chinese reserve data (source Brad Setser) are showing a rather weak picture. China is also buying less US Treasuries and other bonds (see second chart from the NY Times).
Some economic data and earnings might surprise positively. But this will be mostly because people are expecting the worst, not because the data are really good. Second, even during a long traffic jam, there are moments that cars are moving at reasonable speed. Only for a short distance however, as all commuters know.
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China moves at a higher speed than Belgium
Posted on 02. Apr, 2009 by Geert.
Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years.
In Belgium we talk a lot about the idea, in China hey act: The New York Times has an article about the Chinese plan to advance big time in electric and hybrid vehicles:
China’s intention, in addition to creating a world-leading industry that will produce jobs and exports, is to reduce urban pollution and decrease its dependence on oil, which comes from the Mideast and travels over sea routes controlled by the United States Navy.
But electric vehicles may do little to clear the country’s smog-darkened sky or curb its rapidly rising emissions of global warming gases. China gets three-fourths of its electricity from coal, which produces more soot and more greenhouse gases than other fuels.
A report by McKinsey & Company last autumn estimated that replacing a gasoline-powered car with a similar-size electric car in China would reduce greenhouse emissions by only 19 percent. It would reduce urban pollution, however, by shifting the source of smog from car exhaust pipes to power plants, which are often located outside cities.
Beyond manufacturing, subsidies of up to $8,800 are being offered to taxi fleets and local government agencies in 13 Chinese cities for each hybrid or all-electric vehicle they purchase. The state electricity grid has been ordered to set up electric car charging stations in Beijing, Shanghai and Tianjin.
Government research subsidies for electric car designs are increasing rapidly. And an interagency panel is planning tax credits for consumers who buy alternative energy vehicles.
China wants to raise its annual production capacity to 500,000 hybrid or all-electric cars and buses by the end of 2011, from 2,100 last year, government officials and Chinese auto executives said. By comparison, CSM Worldwide, a consulting firm that does forecasts for automakers, predicts that Japan and South Korea together will be producing 1.1 million hybrid or all-electric light vehicles by then and North America will be making 267,000.