Watch What China Does, Not What It Says About Yuan-Dollar Rate

Pay less notice to China’s latest monthly industrial production and retail sales figures — both up 16% in October from a year before, with the trade surplus almost doubling from September, to $24 billion, as the contraction in exports eased to its slowest pace this year — and more to the subsequent statement by the [...]

China And Asset-Bubble Management As Monetary Policy

China is still lending its way towards its 8% growth target for the year. Third-quarter growth has come in at 8.9%, with the National Bureau of Statistics (via Xinhua) pointing up strong fixed-asset investment and rising domestic demand offsetting the drop in exports. The economy expanded by 7.7% over the first nine months. M2, the [...]

China, Japan, South Korea FTA Could Be Kernel Of Something Bigger

There have been previous attempts to unite the nations of north-east Asia, some more ill-starred than others, of course. Some Japanese officials, and let’s go back no further than the 1980s, envisioned Asia’s economies flying like a skein of geese with their own country the lead bird. Regional economic cooperation has always been easier than [...]

Oiling The Decline Of The Dollar As The World’s Reserve Currency

More on the dollar and its growing role as the fault line of the China-U.S. relationship: China, Russia, Brazil, France and the Gulf States are plotting to switch global oil trading out of dollars, according to Robert Fisk writing in The Independent. Instead they would price oil against a basket of currencies and gold. Secret meetings of [...]

The Dollar And The Yuan, Not A Turkish Delight

The finance ministers’ meetings in Istanbul over the weekend revealed a deep crack in the veneer of harmony over the global financial crisis that the world’s leading economies have been seeking to present to the world. Ministers from the seven largest rich nations urged China to take steps to strengthen the yuan, a move Beijing [...]

China Announces Broad Range Of Measures To Finance Domestic Demand Expansion

China’s State Council has announced a broad range of measures to make sure that there is plenty of liquidity in the economy next year and that consumers, companies and infrastructure projects get the loans they need so their spending can boost domestic economic activity.
Among the 30-point mandate (in Chinese):

a 17% target increase in money supply [...]

China, Having Slowed Yuan’s Appreciation, Takes Foot Off Brake

The yuan’s recent little run of depreciation against the dollar seems to be done. Last week, the central bank allowed the biggest decline in China’s currency since ending its fixed exchange rate against the dollar in 2005. That confirmed a view forming since October among investors that Beijing was weakening the currency to help the [...]

China To U.S.: Look After Our U.S. Investments. Unsaid: Or Else?

A curious turn of phrase from Vice-Premier Wang Qishan during his opening speech at the latest bilateral strategic economic talks with his American counterpart U.S. Treasury Secretary Hank Paulson:
”I hope the United States will take all necessary measures to stabilize its economy and financial markets as soon as possible and to ensure the security of [...]

China Makes Big Cut In Rates

China’s newly announced cut in interest rates is the fourth cut since mid-September and biggest since the Asian financial crisis in 1997. The People’s Bank of China lowered its benchmark one year rate to 5.58% from 6.66%, to take effect on Thursday. The central bank also lowered the reserve requirements it imposes on banks, by [...]

BHP Billiton Drops Rio Tinto Bid, Cheering Steelmakers

A rare piece of good news for steelmakers: BHP Billiton is walking away from its bid for Rio Tinto. Aluminum Corp. of China, Chinalco and other Chinese steelmakers, in particular, were among the most outspoken about fears that the combination of two of the largest natural resources companies would have too much control over prices [...]