Global economy on recovery path, risks remain: IMF chief

Reuters– The global economy has stepped back from the brink of danger and signs of stabilization are emerging from the euro zone and the United States, but high debt levels in developed markets and rising oil prices are key risks ahead, the IMF said on Sunday.

“The global economy may be on a path to recovery, but there is not a great Read more of this post

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Growth China’s top priority, inflation key risk-NDRC

Reuters– China’s economic policy priority is to maintain relatively fast growth, but Beijing cannot lower its guard against inflation risks, the head of the country’s top planning agency, the National Development and Reform Commission, said on Sunday.

“First of all, we need to maintain steady and relatively fast economic Read more of this post

China gives Japan approval to buy $10bn in state bonds

BBC– China has given Japan the go ahead to buy $10billion of government bonds as Beijing tries to create a more international role for its currency.

China wants the yuan to become an alternative global reserve currency to the US dollar.

Last year, Beijing and Tokyo agreed to promote Read more of this post

China’s Zero-Growth Economy

Forbes– On Friday, the National Bureau of Statistics announced that China’s production of electricity surged 20.6% in February.  This follows a fall in output in January reported to have been between 5.1% and 7.5% (NBS, inexplicably, has not released a kilowatt figure for the first month of the year).

The statistics bureau reported that electricity production for the two-month period increased 7.1% over the same period last year.  NBS combined the two months to eliminate the statistical distortions caused by the Lunar New Year holiday, which fell in January this year and February last year.

Because electricity output, the best indicator of economic activity in China, invariably outpaces Read more of this post

Chinese deficit widens as exports slump

Financial Times- China’s trade deficit hit $31.5bn in February as exports slumped, underscoring concerns about slowing global demand and cooling growth in the world’s second-largest economy.

February exports from China fell 23.6 per cent from the previous month, and rose a slower-than-expected 18.4 per cent from the previous year. The fall in exports, combined with spectacularly strong imports as China bought commodities Read more of this post

No risk to dollar if China expands yuan’s role: Geithner

Reuters- Treasury Secretary Timothy Geithner said on Thursday that he saw no risk to the dollar from China’s efforts to encourage other emerging market economies to use the yuan more in international trade.

“What you’re seeing China do is gradually dismantle what were a comprehensive set of very, very tight controls on the ability of countries to use their (the Chinese) currency,” Geithner told an event at the Dallas Regional Chamber.

“Over time that will mean – and this is a good thing for the United States – more use of that currency and it will mean the currency will have to reflect market forces … So, I see no risk to the dollar in those reforms,” he said.

China is planning to extend renminbi-denominated loans to its fellow BRICS Read more of this post

Import surge sends China trade to decade-deep deficit

Reuters– China’s trade balance plunged $31.5 billion into the red in February as imports swamped exports to leave the largest deficit in at least a decade and fuel doubts about the extent to which frail foreign demand or seasonal distortion drove the drop.

Import growth of 39.6 percent on the year in February was the strongest in a year, well ahead of the 27 percent expected and more than twice the rate of export growth of 18.4 percent that was barely more than half the pace forecast — albeit at a six month high.

“It’s a very mixed picture,” said Zhang Zhiwei, chief China economist at Nomura in Hong Kong, who cautioned against reading too much into the data given the underlying volatility caused by the Chinese Lunar New Year holiday that saw a week-long factory shut down in January 2012 and February last year.

By Zhang’s calculations that adjust for days worked and exclude the volatility of the 2008/09 financial crisis Read more of this post