Jens Weidmann: It’s ‘Illusion’ to Think Euro Bonds Will Fix Crisis
Asia Channel: Latest Posts
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Asia
Michael is right: policy priority shifted
This short commentary basically echoes Michael Pettis’ last post. Over the weekend, Wen Jiabao, Vice President Xi Jinping, and Vice Premier Li Keqiang took trips to the southern and eastern provinces to “inspect” exporters. They assured manufacturers that they will not be squeezed between tightening monetary policies and rising RMB valuation. In official announcements, the [...]
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Asia
Have Production Subsidies Helped Chinese Exporters?
Do production subsidies work?: Can production subsidies explain China’s export performance?, bySourafel Girma, Yundan Gong, Holger Görg, and Zhihong Yu, Vox EU: China’s exports are booming and – somewhat surprisingly – not just in labour-intensive goods. As Yale trade economist Peter Schott writes in his recent Vox column, China exports an astonishingly wide range of [...]
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Asia
Shanghai seems to discount the fight against inflation
Today was a very good day for the Chinese stock markets and a wonderful start to the week. The SSE Composite rose 4.6% to close at 2792, after reaching a high in the later morning of 2802. Of course it is worth noting that in the last month we’ve seen other very good days – [...]
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Asia
The PBoC battles hot money
Last night SAFE came out with an announcement that I think many of us were openly expecting and secretly dreading. According to today’s Xinhua (“China toughens forex receipts and export settlements”), Stepping up the battle against “hot money” flowing into and out of China, three Chinese central governmental departments are to link their internal electronic [...]
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Asia
Turnaround in sentiment about India
There has been a rapid turnaround in the sentiment about the Indian economy in recent days. A few months ago, nothing could go wrong with the India story. Growth was high, inflation was low, foreign capital was flowing into India, the rupee was strong. Suddenly, everything has turned around. Industrial growth is down to single [...]
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Asia
China and Wal-Mart: Champions of Equality
Christian Broda argues that globalization has not increased inequality. The argument is that “China and Wal-Mart have increased the purchasing power of the poor more than the rich,” and this offsets unequal changes in income. [My response is here and here. The response argues that a full assessment of the change in worker circumstances should [...]
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Asia
Hot money and informal banking
I was too busy to post anything yesterday, but there wasn’t a whole lot new to say except to bemoan the stock market’s performance, again. The SSE Composite was down 3.1%. Today after a rocky start it seemed to find its legs, trading up 1.8% by lunch, before giving it all up to end the [...]
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Asia
Some anecdotal evidence of risks in the banking system
Before I talk about the banking system I just want to mention a quick story. After the 18% hike in fuel prices last week I wondered how taxi cabs in the major cities would fare – obviously fuel is a major component of their running costs. My understanding was that they had not been permitted [...]
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Asia
Markets worry about another interest rate hike in China
Ouch! Just as the stock markets seemed to be gaining some short-term confidence, the knock-out combination of bad markets in the rest of the world and more fears of domestic interest-rate hikes (especially the latter) slammed China’s stock market rally today. Yesterday’s sudden drop in bond prices had, I think, the biggest impact on sentiment [...]
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Asia
A tale of two Asias: China, and almost everyone else
Many emerging Asian economies — Korea, India, perhaps some others — are now intervening to keep their currencies up rather than trying to hold them down. The Raphael Minder of the Financial Times reports: South Korean authorities on Tuesday sold as much as $1bn to shore up the won, according to currency traders in Seoul, [...]
