Tag Archives: China

Asia will grow with 7.1% in 2014 according to the World Bank forecast

Asia industryThe World Bank (WB) estimates that this year recovering demand from industrialized countries will stimulate economic growth in the export-dependent countries in Asia. According to the international financial institution developing Asian economies will grow by an average 7.1% this year. In practice, the bank forecast remains that in 2013 China will increase its gross domestic product (GDP) of 7.6% instead of 7.7%, as expected by the World Bank in 2013. According to the latest research by Finweek Journal, the report by international lenders indicates that the process of reducing the size of asset purchases by the US Federal Reserve, which began this year, which should after a certain time to raise the yield on US Treasuries, it has caused great losses Asian markets.
“The strong global economy growth this year will help the enlargement of the region at a relatively steady pace until he adjusts to tighter global financial conditions”, said Vice President of the World Bank for the East Asia Axel van Trotsenburg.

Asian indexes retreated waiting for important news from China and USA

Asia indexThe leading Asian stock markets recorded a retreat on Thursday. Decline in shares of auto giant Toyota Motor was a major contribution to the decline in Tokyo, while in Sydney applied pressure declines in the banking sector. The benchmark Nikkei 225 stock average fell 0.8%, although the JPY remained relatively stable at a level of 98.64 per USD. The market capitalization of Toyota Motor Corp fell 1.3%, though the carmaker reported a net profit of 438.43 billion JPY (4.45 billion USD) in the three months to the end of September. A year earlier, the company posted a profit of 257.92 billion JPY. The financial statements of Toyota came just a day after shares of Nissan Motor Co fell 10% after cutting profit forecast for the fiscal year. Results of Honda Motor Co a week ago also failed to meet expectations.
The Australian Index S&P/ASX 200 lost 0.2%, considering the sharp declines in some of the largest banks in the country. The shares of Australia & New Zealand Banking Group and National Australia Bank fell by 4.2% and 3.4%, since lenders have announced plans not to pay their last dividend. On the opposite side was the Commonwealth Bank of Australia, whose market capitalization has increased by 1.7% after JPMorgan raised the assessment of the bank to the level of “buy”.

China became leader in oil imports from OPEC

OPECChina will displace the United States from the top position in terms of actual oil imports from member countries of the Organization of Petroleum Exporting Countries (OPEC).
“A few years ago China surpassed the U.S. in terms of purchases of crude oil from the Persian Gulf. In 2013, the Asian country will become a leader in the supply of crude oil from OPEC countries”, it said in an analysis of The Wall Street Journal Europe. According to the organization during the first half of China’s imports from OPEC has reached 3.7 million barrels, while USA – 3.5 million barrels. As a result, this year for the first time in history, Beijing will overtake Washington on purchases of crude oil from OPEC. The third position goes hand in India by 3.4 million barrels.
“The transformation of China into a major importer of oil from the Middle East will increase diplomatic tensions between USA and China in this key region of the world”, the more analysts from The Wall Street Journal Europe.

Huge government spending creates debt problems to China

ChinaWhile the economic power of China grows, its trading partners in USA, Europe and Asia are breathless. Tensions about growth and internal imbalances of the economy forced Chinese leaders to review pursued thus far otherwise successful economic model. The new plan for the second largest economy in the world is now available. It will aim to transform the relations of China with the United States and the world. The new leadership led by President His Jinping and Premier Li Keqiang will run in the next 10 years. Reforms if they are successful, they will transform the model of state capitalism in China in a way that can provide them with a level playing field with trading partners such as USA.
“The private sector will be revived only if you have better protection of intellectual property”, said Nicholas Larti, senior fellow at the Peterson Institute for International Economics. “Definitely one of the things that depress the economy in the private sector is the lack of intellectual property protection”. Over the past three decades technocratic government has invested heavily in coastal factories, modern cities, transport and shipping. This has resulted in exports and by artificially reduced purchasing power of the Chinese currency. Due to the huge trade surpluses Beijing accumulate significant reserves of foreign currency.

China reformed its financial system quiet and fast

China financial systemThe Chinese financial system has undergone sensitive transformation over the past few months. This is done quietly and unnoticed by most investors. The big change is the way in which the central bank in Beijing held its monetary policy. It increased enormously purely market operations. To stimulate the economy, the bank now relies almost entirely on interventions for redemption of bonds. Although this type of liquidity operations are standard for central banks in the western world, this is something completely new for China and has a political flavor. Before manipulating Chinese central bank reserve requirement of banks, which forced them to block part of the deposits and essentially controlled the amount of credit granted. When inflation is high, the central bank raising the requirements for minimum reserve requirements and when growth slowed, the central bank fell for these requirements and thus flow back liquidity into the financial system. In the spring, analysts forecast that the second half of the year, China’s central bank will reduce requirements for additional reserve requirement for banks to stimulate a slowing economy. Not a week passed without rumors of imminent reduction requirements. However, they did not materialize. Central bank lowered its requirements for minimum reserve requirements and many market observers doubted that this is a sign of indecision. However, without undue ostentation Bank was very active. Twice a week at auctions for redemption of bonds (repo) bank sustained influx of liquidity into the financial system.

China is in the same situation as USA and Europe

ChinaImmediately after the Standard & Poor’s announced its historic decision to downgrade the U.S. last Friday, the official Chinese agency Xinhua published a scathing editorial condemning the wastefulness of Western countries and their “addiction to debt”.
“The U.S. government had to put up with the painful fact that the good old days when you can simply borrow enough money to get out of the paste, which is mixed already irretrievably lost”, the Chinese agency, pointing out that China is the largest foreign creditor of the United States. The unspoken implication behind the fierce criticism that China, unlike the U.S. is a country that understands “the general principle that everyone should live according to their income”. Indeed, at the end of 2010 declared gross debt of the central Chinese Government was only 17% of gross domestic product (GDP) of the country – the debt burden much lower than the U.S. (87%), Britain (80%) and Japan (210%). Late last year, S & P, and Moody’s raised the credit rating of China, S & P refer to the moderate leverage, strong exports and rosy outlook for the Chinese economy as a whole. The Chinese government is far from sober, and chaste borrower to be submitted. When assessing the actual debt situation in the country, rating agencies typically use an indicator known as the “general government debt.” This includes debt obligations of the central and local governments as well as those of social security funds. Debt burden in most developed countries like the U.S. is estimated in this way.

February started with high increase of the US markets

Index increaseFebruary began with strong increases in stock market indexes in the U.S. after good data on the expansion of the manufacturing sector in the country early in the new year. This is evident index of business activity in the factory sector in the U.S., which unexpectedly rose to 60.8 points in January to 58.5 points in December. Its value shows that in January the manufacturing sector in the country has achieved the fastest growth rates over the past nearly seven years. Thanks to the growth in employment in the sector it is their highest levels since 1973 Earlier today, economic data from Europe and Asia have confirmed and growth of the factory sector in China, India and the Eurozone. Not so encouraging were, however, cost data in the construction sector in the U.S. shrank by 2.5 percent in December, taking into account the decrease for the second straight month. Construction remains one of the weakest points of the U.S. economy, along with the labor market. However, investors focused on the best data on the manufacturing sector and the leading index S & P 500 rose by 1.1 percent to 1299 points an hour after the start of trading. The index of 30 of the largest and most actively traded companies Dow Jones IA increased by 0.6 percent to 11,982 points while the index of companies by the exchange Nasdaq – Nasdaq Composite, rose by 1.2 percent to 2731 points. Good financial results of Exxon Mobil announced that over $ 9 billion profit for the last three months of 2010, helped the U.S. indices to rise yesterday despite the market instability caused by civil unrest in Egypt.

Crediting in China decreased the Asian indexes

CreditorThe stock market indexes in Asia and the Pacific recorded its largest drop since August during today’s session after the Chinese central bank unexpectedly attacks to curb bank lending in the country’s Bloomberg. China’s central bank unexpectedly increased the minimum reserve requirement for the largest commercial banks from 17% to 17.5%. The measure is temporary and will remain in force over the next two months. Meanwhile, falling prices for metals and energy commodities have led to sales in the mining and energy companies. The regional index MSCI Asia Pacific fell by 1.5 percent to 128.39 points, the number of cheaper shares in its composition is four times larger than appreciation. MSCI Asia Pacific has made his sixth winning week last Friday because of rising expectations that the Federal Reserve will join the Bank of Japan with new measures to inject liquidity into the banking system and economy. Rising yen fell today shares of exporting companies on the exchange in Tokyo. Nikkei 225 fell the most among regional indexes – by 2,1% to 9 388.64 points. The economic data today showed that consumer attitudes of Japanese households for the economy worsened for the third consecutive month in September.

Chinese indexes jumped with 10% in July

China indexJuly brought increases in all markets in the Asian and Pacific region, which offset part of their losses incurred during the previous two months. But stock markets were volatile in anticipation of clearer signs for the development of world economy in the second half of the year, after economic data deteriorated in recent weeks, most of these United States. With the strong growth to identify the stock exchange in Shanghai, where the main Shanghai Composite Index jumped nearly 10 percent in July, while the index of the largest and most frequently traded companies CSI 300 rose by 12%. The reason for this has hopes that the Chinese government will postpone or delay the measures to limit bank lending and speculation of the real estate market in the country. Most of last month have increased notably shares of Chinese companies in the sector of real estate. Their lead from the beginning of this month amounted to 16 percent, which ranks them first among the five industry groups represented in the Shanghai Composite. Shanghai Composite jump of 10% in July by the largest since July last year. During the previous three months, it decreased by between 8% and 10% and became the most loser stock measure in the world this year with a loss of 20%. In the middle of the month it became clear that the Chinese economy has slowed its pace of growth to 10.3 percent in the second quarter from 11.9 percent in the first.

Wall Street decrease continue

MarketOn Thursday, the U.S. indexes are traded with almost all fall session, ultimately S & P 500 recorded its third straight decline. Trading began with the rise of the main indicators for the euro after a moment passed over the 1.3100 against the dollar. Negative mood came from weak corporate accounts of some major technology companies. Nvidia fell 9.9 percent to 9.13 dollars. Manufacturer of computer graphics lowered its forecast for sales in the second quarter, taking a drop in demand in Europe and China. For the second quarter Symantec, in addition to weaker sales and earnings forecast below analysts’ expectations. The biggest maker of antivirus software session ended with a decline of 11.18 percent to 13.03 dollars for security. Colgate-Palmolive also failed to meet sales expectations, leading to a decrease in the Company’s shares by 6.84 percent to 78.12 dollars. Intel and Hewlett-Packard were among the most unprofitable companies in Dow Jones Industrial Average, cheaper respectively 1.41% and 1.53% respectively to 21.03 and 46.41 dollars per share. From Goldman Sachs financial sector is marked by a growth of 3.65 percent to 152.58 dollars per share. Citigroup ended the session with a growth of 3 cents to 4.12 dollars level.