Fidelity | Our analysts report that activity in Asia’s extensive network of factories, ports and logistics centres is accelerating as the Chinese economy leaves the blockade behind. Dockside cranes are once again squeaking in some of Asia’s largest ports as production at Chinese factories progressively speeds up, after several weeks of coronavirus-related disruptions.
I. de la Torre and L. Torralba (Arcano Partners) | The economist Dornbusch says that “crises take long to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine”. The events that have affected the emerging countries this summer have proven Dornbusch was right.
Andrew Sheng via Caixin | There are two main lessons that we can draw from the 2007 to 2009 global financial crisis: the failure of mainstream economics to predict and solve the crisis, and its inability to explain the rise of the Chinese economy
Christine Lagarde’s two-day-visit to China concluded on Monday without any specific agreements on how Beijing will fend off financial risk. But Premier Li Keqiang insisted that they will use all the tools available. Trillions of renminbi of debt have built up in the Chinese economy as a result of decades of stimulus and easy credit.
Hopes for a soft landing in the Chinese economy are fading away. Focus sharpens on renminbi as it dips to increasingly low levels, challenging Central Bank’s massive interventions. China still commands sweeping foreign reserves but, over the latest months, they have shrunk by nearly one trillion dollars. Markets fear they could meltdown forcing a massive depreciation.
Marco Bellochio was probably unaware of how close China could become when he directed his famous movie portraying a rotten Western society besieged by Mao’s revolutionary thrust. History eventually proved that the Little Red Book had less enduring success than the Holy Bible…
By Wang Lan via Caixin | The rules for China’s government provide space for the state-owned economy and public ownership, but this still allows for limiting the role of SOEs.
On the policy front the Chinese state continues to wield its influence over large parts of the real economy.
Chinese e-commerce giant Alibaba sees its share price drop below IPO price for the first time.
The adjustment is serious and is a reaction to the eruption of China’s triple bubble: credit, real estate and stock markets.