Local governments have over-borrowed and are having cash flow problems. Beijing has allowed them to raise new money, via bonds (which previously were banned). This will help with short term cash flow issues, and buy time to get their borrowing in order. But the trend is that the situation is worsening. Much of the local …
Category archives: Energy / Environment
China’s economic growth slows
China’s economy grew by 9.1% in the year to 30 September, down from 9.5% in the year to 31 July. Inflation is just over 6% and the slowdown in growth is seen as beneficial in helping to slow this inflation and achieve a ‘soft landing’ for the economy. China is a strong focus for global …
Severe floods in Thailand
Floods in Thailand have killed more than 300 people, inundated 1,000 factories (including those owned by Toyota, Western Digital, swamped large areas of agricultural land, and forced growth forecasts to be cut by around half (from 3.7% to just over 2%). Regional supply chains for companies including Apple have also been disrupted. Costs of clean …
US mortgage delinquencies increase
Banks’ third quarter results were hit by expected declines in investment banking, reflecting turbulence in global markets, and also by increasing failures to meet repayments of consumer debt, including mortgages and credit cards. http://www.ft.com/cms/s/0/c1865438-f8d2-11e0-a5f7-00144feab49a.html
Regional tensions over oil (South China Sea)
China has warned India to stop working with Vietnam to develop oil and gas fields in teh South China Sea that Vietnam considers lie under its territory. http://www.ft.com/cms/s/0/8316f698-f801-11e0-8e7e-00144feab49a.html
European recession “likely” or “already here”
Several major European car manufacturers have scheduled days with zero production, on the expectation that the market will shrink again in 2012, “a further indication that the debt crisis is beginning to hit the real economy.” And in this article the head of one of the US’s biggest manufacturers warns that the US and …
Continue reading “European recession “likely” or “already here””
EU faces 20 years of rising energy costs
An EU report has been leaked, which describes five scenarios for how we might meet our energy and carbon-reduction targets by 2050. Details are sketchy, and clearly depend on assumptions about the costs of investments, the life-cycles of new generating capacity, depreciation policies, and levels of government subsidy. Some of the projections seem lower than …
India “becoming the land of scams”
Cost of capital brings competitive advantage. And cost of capital is related to trust, or risk. India has a current account deficit — it is importing more than it exports — so it needs to borrow money to fund the imports.
Gap to close stores in US, open in China
GAP has announced that it will close 21% of its 889 US stores over the next two years, and triple its number of outlets in China by the end of 2012.
Global fears and fortunes truly linked
Even China’s strong internal growth can only partially compensate for the negative impact of the West’s economic and debt crises. In the 12 months to September, exports grew by ‘only’ 17% (down from 25% in the year to August). In the same period, imports grew by ‘just’ 21% (compared with 30% in the year to …