It is unlikely that much business will be pulled: the #Bloomberg terminal is too valuable http://t.co/wKBwMztzwV
29 minutes ago
Roubini Topic Archive: China
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China, China, China!
Why does the world care about Chinese monetary policy? In short, the ten countries below enjoy 60% of China’s import demand ($1.3 trillion annualized in December 2009), where the % are listed in the legend.
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I have to Side with China on this One
Yes, the renminbi (RMB) is closer to fair value. Chinese Foreign Ministry spokesman Ma Zhaoxu states:
“Our currency, the RMB, has appreciated more than 20 percent against the U.S. dollar since July 2005, when China moved to a floating exchange rate regime,” Ma said. Before 2005, the RMB was pegged to the U.S. dollar at a fixed rate.
“The RMB exchange rate has drawn close to a reasonable and balanced level, given the international balance of payments and the market supply and demand for foreign exchange,” Ma said.
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China’s Trade Balance Points to Inflation
The Customs Administration announced record trade flows in and out of China in December. Specifically, exports grew at a 17.7% annual pace, while imports surged 55.9% over the year. This is a remarkable one-month rebound; reported export growth beat consensus expectations by a factor of 3.5 (+ 5% export growth and + 32.5% import growth, according to Bloomberg).
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Two BRICs: India vs. Brazil
I started research on India to further explore economic prospects after reading and (excellent) FT article on necessary labor reform. In doing so, I now see a (possibly) much flatter economic growth trajectory for Brazil. Here is an excerpt from the article (last paragraph):
Over the years, numerous academic studies and official reports, including the Second National Labour Commission Report (2002), have recommended major reforms of India’s labour laws. The problem is absence of political will. Until that will can be mustered, the expansion of decent non-agricultural jobs will continue to fall far short of burgeoning supply (the “demographic dividend”), condemning many millions to insecure and ill-paid, informal urban employment (or even unemployment) and mounting underemployment and distress in rural India.
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Gravity will Drag the $U.S.
The US dollar ($US) is on a roller coaster. And since S&P downgraded Greece to BBB+, the dollar has been on the rise. One can attribute the recent shift in the $US to many things – improving US economic conditions, return to risk, or relative weakness in other G7 countries, whatever. But what is clear, is that the dollar’s gaining some strength, 4.7% since the beginning of December on a trade-weighted basis.
