China

Baowu Steel warns of a catastrophic catastrophe in China’s steel sector.
15Aug By TheGreenZoneNo Comments
China, World

Baowu Steel warns of a catastrophic catastrophe in China’s steel sector.

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...
Read More
The threat to stock markets comes from China and the Middle East, not the United States.
12Aug By TheGreenZoneNo Comments
China, World

The threat to stock markets comes from China and the Middle East, not the United States.

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...
Read More
Risk or opportunity? Outcomes for China amid worries of a US recession
8Aug By TheGreenZoneNo Comments
China, World

Risk or opportunity? Outcomes for China amid worries of a US recession

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...
Read More
China offers Pakistan $300 million in Panda bonds in an effort to alleviate its economic woes.
27Jul By TheGreenZoneNo Comments
Asia, China

China offers Pakistan $300 million in Panda bonds in an effort to alleviate its economic woes.

Panda Bonds are onshore renminbi-denominated bonds issued in the People’s Republic of China by non-Chinese entities and serve as a capital-raising platform for foreign countries or companies targeting Chinese investors. With an aim to improve the financial stability of a cash-strapped country which is grappling with several other challenges such as high inflation and declining forex reserves, Pakistan has sought cooperation from Chinese institutional investors to launch Panda Bonds to raise between $250 million and $300 million initially. Federal Minister for Finance and Revenue Muhammad Aurangzeb discussed the plan with the Governor of the People’s Bank of China (PBoC) Pan Gongsheng during a meeting in Beijing, covering a wide range of economic issues on Friday. Panda Bonds are ...
Read More
China’s downturn suggests a special liquidity trap
25Jul By TheGreenZoneNo Comments
Asia, China

China’s downturn suggests a special liquidity trap

HONG KONG, July 25 (Reuters Breakingviews) - China is awash with money and its growth is slowing. To avert a prolonged stagnation, President Xi Jinping’s administration may need to spend its way out of the problem. Yet this and other classic remedies to such a malaise may not be effective in Beijing’s “socialist market economy”. China’s condition may be seen as what economists call a liquidity trap, though the term means different things to different people. Writing a century ago during the Great Depression, John Maynard Keynes described a situation where bond yields fall to a lower limit and individuals hoard cash. In 1998 after Japan’s property bubble burst, its economy slid into recession and monetary policy lost impact as interest rates were close to zero, Paul Krugman warned,...
Read More
24Jul By TheGreenZoneNo Comments
Asia, China

China is going through its worst-case scenario of a financial catastrophe in 2008.

China’s leaders on Thursday announced lofty economic goals for the coming years, repeated Chinese Communist Party (CCP) buzz phrases and offered up traditional Marxist jargon after the Communist Party’s much-anticipated Third Plenum. However, as Reuters reported, they provided “no implementation details.” As a result, the Chinese economy will continue to erode. Continued erosion will almost inevitably result in a debt crisis, undoubtedly one of historic proportions. The CCP pledged, at the meeting held once every half decade, to enhance social security and healthcare programs and implement tax and financial reforms, but the ruling organization has promised these changes before. The Plenum communique said China would support “new quality productive forces,” one of Xi J...
Read More
23Jul By TheGreenZoneNo Comments
China, Market

Mozambique and Malaysia report stable ilmenite prices while China’s market slows.

The Ilmenite market in the initial stages of July 2024 reflects a patchwork of stability and fluctuation driven by regional economic conditions and industry demands. Mozambique and Malaysia are seeing steady or positive developments in production and demand, while China faces challenges due to economic slowdowns and regulatory impacts. In Mozambique, Ilmenite prices have remained stable at USD 300 per metric ton (MT) for IP-3 Grade, (FOB) Moma, during the first half of July. This stability follows consistent pricing from the previous month. Kenmare Resources, the operator of the Moma Titanium Minerals Mine in northern Mozambique, has reported a noteworthy increase in production figures. Heavy Mineral Concentrate (HMC) production reached 342,600 tonnes in the second quarter of 2024, mar...
Read More
China economy: Key conference gives scant insights on how to confront the growing crisis.
20Jul By TheGreenZoneNo Comments
China, Market

China economy: Key conference gives scant insights on how to confront the growing crisis.

China’s ruling Communist Party has set ambitious long-term policy goals at its most important political meeting on reform, but offered little detail on how to pull the world’s second-largest economy out of a worsening downturn. In a behind-closed doors meeting known as the third plenum, more than 360 members of the party’s Central Committee — including the most senior political and military leaders and heads of state-owned enterprises — held talks from Monday to Thursday at a hotel in Beijing. According to a communique released Thursday, discussions at the plenum — traditionally held every five years — centered on how to deepen reforms in a wide range of areas and advance “Chinese-style modernization,” a broad ideal for the country’s development backed by Chinese lead...
Read More
<strong>Uncertainty and insecurity in job markets contribute to China’s economic slowdown</strong>
18Jul By Joe RodriguezNo Comments
Asia, China

Uncertainty and insecurity in job markets contribute to China’s economic slowdown

Unemployment and growing job insecurity in China have seen a sharp increase, becoming a major contributor to the ongoing slowdown in the Chinese economy. The real estate crisis is another factor that is being cited for the dip in China’s GDP, which is however a fallout of declining confidence among property buyers amid the disturbing unemployment situation in the country. In the previous financial quarter, the growth rate of the Chinese economy shrunk to 4.1 percent, missing the expectations of 5.1 percent. While the fresh graduates are struggling to find jobs, those already employed are scared of being sacked anytime or forced to work at lower salaries. Joblessness in China is still high, with the youth unemployment rate remaining at 13.2 percent in June. The Chinese job market is ...
Read More
China’s Communist Party plans to revive the economy by focusing on technology and security.
18Jul By TheGreenZoneNo Comments
China

China’s Communist Party plans to revive the economy by focusing on technology and security.

BANGKOK (AP) — In a year of major elections that will determine the destinies of many countries, China’s ruling Communist Party is holding closed, top-level meetings in Beijing to set strategies for reviving its slowing economy. State media likened the meetings that end Thursday to reforms started in the late 1970s that opened China’s economy to foreign investment and private enterprise. State broadcaster CCTV said the agenda for this year’s meetings is to study and endorse “all-around deepening reforms.” Nearly a half-century after the late leader Deng Xiaoping launched China’s ascent as a manufacturing powerhouse, the party is doubling down on leader Xi Jinping’s blueprint for technology- and national security-focused development. Economists say it’s unclear if that will...
Read More