James Hamilton at Econobrowser takes a look at the supply-demand imbalance in China’s oil market.:
Chief among the questions here are: (1) how could Chinese oil demand have grown 17% in 2004 despite a 35% increase in the price of crude oil; (2) how could this demand growth suddenly be reduced to a 1.4% growth rate in the first half of 2005 despite real output growth continuing at 9.5%; and (3) what do these trends imply is going to happen to Chinese oil demand over the next year?
In the wake of Baidu’s blistering IPO and Yahoo!’s big deal with Alibaba, The Big Yuan takes a look at China’s new media companies. Meanwhile, Fons notes a potential cultural and legal clash of intellectual property rights, pointing to a nicely titled Forbes article: ‘Alibaba’s Thieves threaten Yahoo.‘ DotCom-bust survivor Imagethief is experiencing Deja Vu:
There is no mistake so colossal, so notorious, that people won’t make it again. In fact, the opposite is probably true. The bigger, the balder, the more idiotic the situation, the more likely it is to be repeated. How else to explain that China is whipping up Internet speculation frenzy version 2.0?
I lived through the first one. I started doing professional Internet work in 1995, joined an e-commerce firm in 1997 (in Singapore) and rode the rise and fall of the bubble. The day the CFO took me through my stock option letter is gouged into my memory. “You’re going to be a millionaire,” he told me, after walking me through the numbers in a meeting in 1999. Richard Li had put US$25 million into our company, and the investment bankers were sniffing around. So I believed I was going to be rich. We all did.
I can say with total authority that, to this day, I am not rich. Nor are any of my ex-colleagues from that company. We went from 220 people to 10 in a heartbeat. I remember; I fired forty of them myself.
Logan Wright says that pressure for China to further revalue will continue, noting that the 2.1% revaluation hasn’t placated DC’s lobbyists.:
A coalition committed to maintaining a strong U.S. industrial base today released data reflecting that China has managed to maintain a flat exchange rate following the People’s Bank of China’s long-awaited July 21 announcement of a change in currency policy. The
change, involving a minuscule 2% appreciation of the yuan and the adoption of a basket of unidentified currencies to determine the yuan’s value, potentially incorporated a flexibility mechanism that could steadily increase the value of the yuan over time to a level that would reflect underlying economic fundamentals.
Thomas Barnett spots the buried lead on China’s revaluation, the end of Bretton Woods II.:
In effect, the emerging markets of Developing Asia had, by and large, replicated the same sort of currency stabilization strategy that America used in its post-WWII resurrection of the West (better to peg than to float).
Most economies there had, by now, moved off strict pegs and allow some level of controlled float. With China joining that dynamic, the synchronization of Asia’s internal economic rule sets with the global economy’s growing rule set will be accelerated.
In many ways, this is a real tipping point in Asia’s progressive integration with globalization’s more mature Functioning Core of the West. In effect, Asia reached the point of diminishing returns with that pegged strategy, meaning it achieved a level of economic development in which more control is to be had through allowing the currency to float than keeping it fixed, presuming the economy has the necessary institutions needed to offset that float dynamic. Done well, your economy will self-correct better, avoiding either overheating or hard landings.
The Times of India has picked up, and hyped, the Business Week series on India and China, with an article titled "India is a better model than China." Gerald Hibbs suggests the article is a touch too optimistic from the Indian perspective.:
Alright, now the guy did qualify this statement as “over time”, that slack being cut let me state that this is pure piffle. At the beginning of the 20th century America had 70% of its workforce working in agriculture by the 21st century that figure had dropped to less than 1%. China is still sowing and reaping by hand (peasants’ hands) and has a huge backlog of people who can’t wait to leave the farm and go to the city to lead the “noble life” as the magazines portray it. Add in that China is just beginning to utilize all the talent of Chinese women who are taking the colleges by storm. Sure, sure. . .over time. But that time is a long way off.
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Mao: The Unknown Story - by Jung Chang and Jon Halliday:
A controversial and damning biography of the Helmsman.
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August 16th, 2005 at 10:07 pm
Chinese equities still have big potential besides baidu und alibaba. I remember in 2001 where stocks like Sina, Sohu and NetEase could be bought for less than one dollar and how the rose in 2003 to above $50 and more.
August 17th, 2005 at 7:21 pm
CHINA #1 GO CHINA GO