Managing The Dragon

In our recent post, Pork Prices and Inflation, MTD noted that pork is one of the staples in the Chinese diet, that a recent bout of pig disease has caused pork prices to rise to all time levels, and that increases in the price of pork are one of the reasons for the recent surge [...]

When inflation hit 21.7 percent in 1994, Zhu Rongji, China’s then economic czar, literally shut down lending by assigning tough credit quotas to the regional banks. Zhu told bank officials that they would lose their jobs if they exceeded his credit quotas. As a result of Zhu’s tough administrative measures, inflation in China slowed to [...]

Inflation and tight credit are proving to be the two big economic issues in China this year. On February 9, the People’s Bank of China, China’s central bank, raised the one-year borrowing rate by 25 basis points to 6.06 percent, and the rate on one-year deposits by 25 basis points to 3.0 percent. These rate [...]

Well, it’s that time again. As we approach the end of the first decade of the 21st century, and prepare for the beginning of the second, it’s time to look back and see how we made out on our predictions for 2010. On January 12, 2010, we made the following five predictions: 1. By the [...]

China’s inflation rate jumped to 5.1 percent in November, its highest level in 28 months. November’s increase follows a 4.4 percent increase in October and a 3.6 percent increase in September. In our previous post on inflation, we quoted Andy Rothman, China Macro Strategist for CLSA Asia-Pacific Markets, who said that rising food prices, particularly [...]

In October, China’s inflation rate jumped to 4.4 percent from 3.6 percent the month before, catching many China watchers by surprise. October’s rate was the highest inflation has been in China in two years, and well above the government’s target of 3 percent. Given China’s impact on the global economy, October’s surge in inflation provoked [...]

The global economy is much more stable today than it was at this time last year, but that doesn’t make 2010 any easier to predict. In January 2009, the debate was all about numbers. Would China’s economy grow by 8 percent as the government was predicting, 7.2 percent as the World Bank concluded, or considerably [...]

It was very interesting to note the differences in Tuesday’s coverage of President Obama’s visit to Beijing by The Wall Street Journal and the China Daily. The lead story on Obama’s trip in The Wall Street Journal focused on the sharpest public critiques by Chinese officials towards U.S. policy that I have seen in some [...]

The flow of good news out of China continues, but there are some clouds forming on the horizon which are important to keep in sight. First, the good news. Last week, we highlighted car sales, which increased by 19.2 percent over last year during the first six months of the year and are likely to [...]