China

The statement by China’s top steelmaking firm, which accounts for 7 percent of global output, that the industry faces a severe crisis, underscores the extent of the slowdown in the Chinese economy and its global significance. Outlining the company’s half-year position on Wednesday, Hu Vangming, chair of China Baowu Steel Group, said the “winter” would be “longer, colder and more difficult than we expected.” In comments to Bloomberg, he said in the process of resolving it, cash was more important than profit and “financial departments at all levels should pay more attention to the security of the company’s funding.” His remarks were echoed by Hou Augui, the general manager at the state-owned firm, who said “the current situation in the steel industry is more severe that the downtu...

China’s steel industry is facing a crisis more serious than the recessions of 2008 and 2015. The world’s largest steelmaker, China Baowu Steel Group, warned of this, Bloomberg reports. The crisis is likely to be longer and more severe than the steel sector expected, said Hu Wangming, chairman of Baowu Steel Group, at the company’s semi-annual meeting. The group produces about 7% of the world’s steel, and this message from it is likely to cause concern among competitors in Asia, Europe and North America who are trying to cope with the new wave of Chinese exports. Baowu Steel will focus on minimizing risks. The company recommends that financial departments at all levels pay more attention to the security of financing and strengthening control, including overdue payments and the d...

Back in the 1930s, the French government constructed what it thought was an impregnable defence system to prevent a repeat of the German invasion at the start of the first world war. The Maginot Line might have looked impressive but proved to be a white elephant because when the attack came in 1940 it was in a different place altogether. In the past week the financial markets have displayed something of a Maginot Line mentality. They are right to think there is a threat lurking out there but they are wrong to think the biggest danger is a recession in the US. The real threat comes from elsewhere. To be sure, the US economy is slowing down, but it is not remotely close to recession. Unemployment is rising but from historically low levels. The US central bank, the Feder...

Global stock markets, particularly those in Asia, experienced a significant downturn on 5 August 2024, with the Nikkei 225 Index shedding 12.4%, its worst day since the 1987 Black Monday crash. A confluence of factors, including fears of a US recession, had triggered a massive sell-off in stock exchanges worldwide. The ripple effects of a potential US recession are profound and far-reaching. As the US is a major consumer and importer, a slowdown in the American economy can significantly dampen global demand, impacting export-oriented economies in Asia, which rely heavily on the US market. This is particularly concerning given that the US accounts for a substantial share of many Asian countries’ exports. According to the World Bank, the US accounts for more than 15% of China’s and South...