Rising Costs Threaten China’s Reputation As “World’s Factory”

lweb.es/f2500 12.27.2016

According to the director of the Center for Economic Diplomacy, Fudan University, Shanghai, China’s reputation as the world’s factory is increasingly threatened by rising costs, the accelerated manufacturing resurgence in various developed countries and the growing competitiveness of emerging economies. This situation has prompted numerous Chinese manufacturers to move their factories offshore. Manufacturing has long been at the foundation of China’s rise into a global economic power and the country needs to consolidate this manufacturing foundation. Otherwise China will risk hollowing out its real economy before it grows strong enough.

Anti-Dumping Measures Against Chinese Goods to rise in 2017

lweb.es/f2472 12.23.2016

In 2016 there were more than 260 anti-dumping measures or investigations against Chinese goods. This year’s number represents a roughly 17.7% rise from 2015. The measures were aimed at a wide range of Chinese goods but the main target was Chinese steel products. “All these countries like to blame China for their own problems in the steel industry, but China didn’t create the problems for them, it’s sluggish global demand amid weak economic growth that caused the problem,” said a research fellow at the China Institutes of Contemporary International Relations.

China: GDP Up Nearly 7% In First Three Quarters Of 2016

lweb.es/f1825 11.11.2016

iconAccording to the National Bureau of Statistics of China’s preliminary estimates, the country’s gross domestic product in the first three quarters of this year was 52,997.1 billion yuan, a year-on-year increase of 6.7 percent. The value added of primary industry was 4,066.6 billion yuan, up by 3.5 percent year-on-year; the value-added of secondary industry was 20,941.5 billion yuan, up by 6.1 percent; and that of tertiary industry was 27,989.0 billion yuan, up by 7.6 percent. Third quarter GDP rose by 1.8 percent on a quarter-on-quarter basis.

China Has Problem With Zombie Firms

lweb.es/f1391 9.08.2016

iconOne of the structural flaws driving China’s instability is the existance of a investment situation where profits of state-owned enterprises, known as SOEs, are largely privatised to SOE personnel and losses of SOEs are socialised on to the state budget. This is the cause of the large amount of excess capacity in China’s heavy industries today, and also of the serious non-performing loan problem in state-owned banks. The growing presence of “zombie” firms coincides with the downward trend in the growth of productivity. The social pain resulting from necessary economic adjustments will have to be addressed.

Clinton Talks Up Clean Coal: Revitalize Coal Country

lweb.es/f1200 9.08.2016

iconHillary Clinton is promising to revitalize Pennsylvania communities hurt by a downturn in the coal and steel industries. With regard to the coal industry she asked whether there was a technology that could create clean energy from coal, and stated that she would revitalize the coal producing areas. Earlier in the primaries, Donald Trump made his position clear on the coal industry saying that he wanted clean coal and that the country would, in his words, have an amazing mining business.

Oil At US$100? Hedge Funds Bet On Supply Crunch

lweb.es/f1101 7.20.16

iconOEF REVIEW:Oil investors are buying contracts that will only pay out if crude oil rises well above US$100 a barrel over the next four years – a clear sign some believe today’s bust is sowing the seeds of the next boom. The options deals, which brokers said bear the hallmarks of trades made by hedge funds, appear to be based on the belief that current low prices will generate a supply crunch. Over the last month, investors have bought call options for late 2018, 2019 and 2020 at strike prices of US$80, US$100 and US$110 a barrel. Previously, some investors had already built super-bullish positions. The options deals suggest a concern about shortages as demand begins to outstrip production – the traditional boom and bust commodities cycle.