A bubble in pessimism
China’s economy is inefficient, but it is not unstable
“JUST the other day we were afraid of the Chinese,” Paul Krugman recently wrote in the New York Times. “Now we’re afraid for them.” He is among a number of prominent commentators contemplating calamity in the world’s second-biggest economy. Three measures seem to encapsulate their fears. Economic growth has slowed to 7.5%, from its earlier double-digit pace. The investment rate remains unsustainably high, at over 48% of GDP. Meanwhile, the debt ratio—ie, what China’s firms, households and government owe—has risen alarmingly, to 200% of GDP, by some estimates.
Concerns about the first number were assuaged a little this month, when China reported strong figures for trade and industrial production (which rose by 9.7% in the year to July; see chart). Yet beneath the cyclical ups and downs, China has undoubtedly seen its momentum slowing.
It is the combined productive capacity of China’s workers, capital and know-how that sets a maximum speed for the economy, determining how fast it can grow without inflation. It also decides how fast it must grow to avoid spare capacity and a rise in the numbers without work. The latest figures suggest that the sustainable rate of growth is closer to China’s current pace of 7.5% than to the 10% rate the economy was sizzling along at.
For many economists, this structural slowdown is inevitable and welcome. It marks an evolution in China’s growth model, as it narrows the technological gap with leading economies and shifts more of its resources into services. For Mr Krugman, by contrast, the slowdown threatens China’s growth model with extinction.
China, he argues, has run out of “surplus peasants”. Chinese flooding from the countryside into the factories and cities have in the past kept wages low and returns on investment high. The flood has slowed and, in some cases, reversed. So China can no longer grow simply by allocating capital to the new labour arriving from the fields. “Capital widening” must now give way to “capital deepening” (adding more capital to each individual worker). As it does so, investment will suffer “sharply diminishing returns” and “drop drastically”. And since investment is such a big source of demand—accounting for almost half of it—such a drop will be impossible to offset. China will, in effect, hit a “Great Wall”. (The metaphor is so obvious you can see it from space.)
The question is whether Mr Krugman’s concerns are justified. He is right about China running out of “surplus” labour. China’s countryside is no longer so overmanned that people can leave without being missed. Now when they go, the job market tightens and wages rise in the places they leave behind. To tempt them away, wages must rise in the places to which they go.
Yet Cai Fang of China’s Academy of Social Sciences believes that China ran out of surplus countryside labour as far back as 2003. If the economy were going to run into a wall, it would have done so a decade ago. In fact, the economy has since enjoyed spectacular growth. For some time, the movement of workers from agriculture into industry and services has not been the chief source of China’s success. From 1995 to 2012 this movement added only 1.4 percentage points to China’s annual growth, says Louis Kuijs of the Royal Bank of Scotland. Instead, most recent growth has come from raising the productivity of workers within industry, not moving new ones in. Mr Krugman fears the extinction of a model China is already doing without.
He and other respected commentators, notably Michael Pettis of Peking University, are certainly right to criticise China’s high investment rate, for it is a source of great inefficiency. Investment should expand an economy’s capacity to meet the needs of its consumers or its export markets. But in China, Mr Krugman argues, much investment spending is Sisyphean: it is simply adding to the economy’s capacity to expand its capacity.
Yet over-investment is not yet a source of instability, thanks to a system that depends on captive savers. Because the government sets an interest-rate ceiling on deposits, the banks underpay depositors and undercharge corporate borrowers—in effect, a tax on household savers and a subsidy for state business. According to a 2012 paper by Il Houng Lee of the IMF and co-authors, this transfer from households to big borrowers averaged an annual 4% of GDP in 2001-11. The subsidy allows big firms to invest in projects that would otherwise be unviable. The authors reckon China’s investment rate should be closer to 40% than 48%. But the distortion can be sustained while depositors continue to finance it—and, given also China’s controls on capital outflows, they have little choice.
It is clear that China should lower its investment rate. But Mr Krugman and others say that a lower investment rate could precipitate a crash. Their concern echoes a 70-year-old model of growth devised by Roy Harrod and Evsey Domar, in which the economy is balanced on a knife-edge between boom and bust.
The model recognises that investment plays a dual role in an economy. It is, as Martin Wolf of the Financial Times puts it, both “a source of extra capacity” and a “source of demand”. Sometimes these two roles work at cross purposes. If growth slows, then the economy will not need to add as much capacity. That implies less investment. But because investment spending is a source of demand, less of it also implies less demand, lowering growth still further. In avoiding excess capacity, the economy ends up creating more of it.
But how well does this model fit China? The country has both one of the world’s highest investment rates and one of its most stable growth rates. That is presumably because investment is partly orchestrated by the government, which encourages more capital spending when other sources of demand are weak, and vice versa. China’s state-owned enterprises and local-government investment vehicles may not allocate capital to the right things. But at least they mobilise it at the right moments.
Indeed, the inefficiency of Chinese investment may be one reason why it will not create great instability. Mr Lee and co-authors point out that China now requires ever higher investment to generate the same rate of growth (its incremental capital-output ratio, as economists call it, is rising). But a corollary is that the same rate of investment is consistent with China’s slowing rate of growth.
Pessimists worry that slower growth will require less investment in capacity, which will, in turn, depress demand. But if the reason for slower growth is a reduction in the efficiency of investment, then slower growth will require just as much of it, precisely because it delivers less bang for the buck.
Critics of China’s high investment worry not just about the redundant capacity it creates, but also about the debts it leaves behind. China as a whole is thrifty: its saving rate is even higher than its investment rate. But savers and investors are not usually the same. Standing between them is China’s financial system, which transfers vast resources from the first to the second. The debts of China’s firms amounted to 142% of GDP last year, according to Goldman Sachs, and investment vehicles sponsored by local governments had debts worth another 22.5% (see chart). Though impossible to calculate accurately, bad debts might amount to the equivalent of a quarter of the country’s GDP.
The fat pipes of the financial system
A similar credit boom preceded America’s crisis in 2008, and Japan’s in the early 1990s. It is therefore natural to fear that China will suffer a similar fate. But a closer examination of their experience suggests that China is unlikely to repeat it.
Economists sometimes divide America’s woes into two phases: first the housing bust and then the Lehman shock. America’s house prices began falling as early as 2006, damaging household wealth. Housebuilding slowed sharply, weighing on growth, and many construction jobs disappeared. But for two years America’s central bank, the Federal Reserve, was able to offset much of the harm to growth, while unemployment rose only modestly.
All that changed in September 2008 when Lehman Brothers went bust, triggering acute financial panic. Nobody knew how big the losses from mortgage defaults might be, nor who might end up having to bear them. Creditors, shareholders, marketmakers and traders all rushed to make sure it was not them, by pulling credit lines, demanding collateral and dumping their securities.
In many ways, their dash for the exits proved to be more damaging for the economy as a whole than the danger from which they were seeking to escape. After the Lehman shock, a manageable number of mortgage insolvencies became a catastrophic liquidity problem. The lending mistakes of the past crippled the supply of finance in the present.
China may suffer something like the first phase of America’s slowdown, but it should escape the second.It will not allow any of its big financial intermediaries to go bust. Investors may stop buying the wealth-management products (WMPs) that help to finance China’s so-called shadow banking system. But shadow banking is a smaller source of finance in China than it was in America. And if investors stop buying WMPs, they are likely to shift back into traditional bank deposits instead. The banks should thus be able to resist a credit crunch of the kind that crippled America’s economy. And even then the government has plenty more scope, if need be, for monetary and fiscal stimulus.
Some economists argue that efforts to sustain demand will prove misguided. An unsustainable boom will leave workers stranded in the wrong jobs, making a painful bust necessary to reallocate them. Yet restructuring is not unique to a recession. Even in a steadily growing economy, plenty of upheaval is going on under the surface, as people are hired and fired, and as they hop between jobs of their own volition. Just as busts push workers out of declining industries and into unemployment, so booms pull them out of sunset industries into sunrise ones.
China is no stranger to economic restructuring. Over the past decade, the share of workers in agriculture fell from half to about a third. Exports have fallen from 38% of GDP in 2007 to 26% last year, while services now contribute as much to the economy as industry. And this enormous shake-up of employment and production took place in an economy that was growing by about 10% a year. China’s economy can, it seems, evolve and expand at the same time.
12. August 2013, 12:28:45 SGT
Dolar AS Terguncang
oleh Nicole Hong
Nilai mata uang dolar Amerika Serikat (AS) kembali terpuruk seiring dengan munculnya keraguan pada diri para investor mengenai kekuatan pemulihan ekonomi Amerika.
Indeks dolar Wall Street Journal, papan ukur nilai tukar dolar AS terhadap tujuh mata uang terkemuka dunia, turun sebesar 4% pada sebulan belakangan dan mencatat pelemahan tujuh minggu pada Jumat lalu. Sebelum terjadi aksi jual, yang dimulai setelah dolar mencetak rekor kenaikan dalam tiga tahun pada awal Juli, dolar naik sebesar 8,3% tahun ini.
Untuk perbesar gambar, klik di sini.
Menurut sejumlah manajer dana kelolaan, perubahan cara pandang mengenai kapan tepatnya bank sentral Amerika Serikat mulai mengekang kebijakan easy money di tengah krisis keuangan membalik situasi.
Investor menimbun dolar pada awal tahun di tengah keyakinan bahwa pemulihan ekonomi AS akan mendorong bank sentral AS akan mengurangi aksi beli obligasi, yang menyalurkan $85 miliar ke dalam perekonomian AS tiap bulan.
Menurunnya pasokan dolar tidak saja akan mendongkrak nilai mata uang tersebut. Menurut para analis, sinyal positif mengenai perekonomian AS akan memancing aliran uang dari luar AS.
Namun, buruknya data ekonomi telah memicu para investor mata uang untuk mengurangi sepkulasinya atas dolar yang bertopang pada program pembelian surat utang bank sentral AS pada September.
Sejak akhir Mei, para investor memangkas investasinya pada dolar sebesar 49% menjadi $21,7 miliar.
“Kami berada pada titik tempat para investor tak lagi memiliki keyakinan apakah dolar akan terus bertahan,” ujar Samir Sheldenkar, mitra investasi dari Harmonic Capital Partners LLP, London. Perusahaan itu baru-baru ini memangkas investasi dolar karena tingkat pertumbuhan lapangan kerja di AS belum lagi membaik sejak awal tahun.
Bank sentral AS mengatakan takkan mengurangi pembelian obligasi karena pasar tenaga kerja AS mengalami kemajuan “mendasar.” Pada Juli, 162 ribu lapangan kerja di AS tersedia. Jumlah itu lebih rendah dari harapan para ekonom.
Pada saat yang sama, ada sejumlah tanda bahwa resesi selama 1,5 tahun di Eropa akan segera berakhir dan memperbesar daya tarik mata uang euro. Demikian pula, kecemasan bahwa perlambatan ekonomi Cina akan menyeret perekonomian global kini terbukti berlebihan. Hal tersebut dapat kembali membangkitkan ketertarikan pada aset lebih berisiko seperti mata uang negara berkembang.
Para investor mata uang memusatkan perhatian pada laporan lapangan kerja berikut yang rencananya akan dilansir pada 6 September. Pasalnya, pengumuman itu diyakini akan menunjukkan langkah bank sentral AS selanjutnya pada pertemuan 17-18 September.
Menurut para analis dan investor, jika Federal Reserve tidak mengumumkan adanya pemangkasan program pembelian obligasi, dolar akan kian terpuruk.
angka pengangguran di amrik TURUN DALAM 5 TAON
Give Me Your Yuan: Chinese Are Eager for U.S. Assets
By Peter Coy on August 01, 2013
Could it really be that simple? American government officials at all levels are flocking to Beijing and Shanghai in hopes of recruiting Chinese investors who are eager to expand their businesses, or in some cases safeguard their wealth. While China owns more than $1.2 trillion in U.S. Treasury securities, it has only $28 billion in direct investments in American companies and real estate, according to estimates by the Rhodium Group, a private research company. By the end of 2020 that sum could balloon to between $100 billion and $400 billion, Rhodium says.
The Obama administration is working hard to smooth the way for China’s dollars. In July, Chinese and U.S. leaders meeting in Washington agreed to restart negotiations toward a bilateral investment treaty that would accelerate the flow of investment from China to the U.S. in exchange for increased American access to China. U.S. Secretary of the Treasury Jacob Lew said the agreement “stands to be a significant breakthrough.”
China, however, isn’t just another Brazil or Denmark with money to spend. It’s an economic juggernaut with historical resentments against the West and an increasingly assertive military. U.S. defense and intelligence authorities worry about China’s methodical effort to attain the world’s most advanced civilian and military technology. The Chinese, for their part, dislike what they perceive as America’s effort to stymie them by declaring some sectors of the U.S. economy off limits—calling it, in one memorable phrase, “stepmotherly.”
Chinese purchases of U.S. factories, research and development labs, farmland, and oil fields are likely to vex both countries for years to come. The most recent hambone of contention is whether America’s food supply is threatened by Shuanghui International Holdings’ attempt to acquire Smithfield Foods (SFD). On July 24, Smithfield said the Committee on Foreign Investment in the U.S. (CFIUS) needed an extra 45 days to review the deal, which critics allege could somehow make it easier for contaminated Chinese food to enter the U.S.
During the 1980s, Japanese investors’ purchases of landmarks such as Rockefeller Center and the Pebble Beach golf resort stoked anxiety about Japan’s growing influence over the U.S. economy. Those fears turned out to be misplaced, the product of xenophobia and an exaggerated assessment of Japan’s economic strength. Now, before the floodgates of Chinese money really open wide, would be a good time for a sober conversation. Should the U.S. welcome Chinese investment with a smile or a gimlet eye? What sectors should be off limits on national security grounds? Should China be treated like any other country when it comes to investment, or does it require special scrutiny? For the sake of both nations, says Ian Bremmer, president of Eurasia Group, a consulting agency, “It’s very important that the U.S. develop clear rules of the road.”
The U.S. status quo is openness. Unlike countries such as Canada that evaluate the overall benefit of a foreign investment before saying yes or no, the U.S. sets the default at yes. A deal is rejected only if it violates antitrust rules or if CFIUS, an interagency committee, concludes it “threatens to impair the national security of the United States.” During the presidential campaign last September, Obama cited national security to prevent a Chinese company from buying four wind farms near a Navy test range in Oregon. Other potential buyers have backed down from sensitive purchases before the White House ruled, including Huawei Technologies, which was founded by a former People’s Liberation Army technician but denies links to Chinese intelligence.
To date, America’s general openness has benefited both countries. China’s Lenovo (LNVGY) kept R&D in North Carolina after buying and expanding IBM’s (IBM) ThinkPad business. Chinese investors have also helped the U.S. increase its energy supply; in February, China Petrochemical signed a $1 billion deal to buy half of a shale oil field in Oklahoma owned by Chesapeake Energy (CHK). Wanxiang America in Elgin, Ill., has rescued a string of failing or failed auto-parts companies. It also bought lithium ion battery maker A123 Systems out of bankruptcy last year, playfully renaming it B456 Systems. Contrary to fears that China would suck American companies dry, Wanxiang has increased employment. “Our slogan is, ‘Every penny we make, we’re going to reinvest,’ ” says company president Pin Ni. “We haven’t sent any dividend, not even a penny, to China since day one.”
“It is emphatically in the U.S. national interest to gain a larger share of these new investment flows” from China, Asia Society scholars wrote in the preface to a research paper last year. American companies that get bought find they can sell more in China, says Thilo Hanemann, research director at Rhodium Group. “The Chinese are not going to start making socks and underwear in the U.S.,” he says, “but some things that they should be making in the U.S. could come back.”
National security hawks, however, warn that the U.S. risks selling China the very goods the Chinese need to undermine American interests. “There is this stupid idea that there is this magical pile of technologies that are purely military, and all these others that are purely commercial that we don’t need to worry about,” says Michael Sekora, who started Project Socrates in the Reagan administration to monitor and rebuild U.S. competitiveness. Sekora, a physicist, says he attended a recent meeting in Texas in which a congressional staffer asked him about “dual-use” technologies that have both civilian and military applications. “I said, ‘Sir, that’s sort of a dumb question. Give me a technology that’s not dual-use.’ ”
Usha Haley, a West Virginia University professor who testified against the acquisition of Smithfield, says even Chinese acquirers that aren’t state-owned are serving the government’s interests; otherwise they wouldn’t get permission to do the deals. “They will start controlling our agriculture,” Haley says. “Their motives are entirely benevolent at this point, but how do we know that will continue?”
This kind of talk drives the Chinese to distraction. China Investment President Gao Xiqing complained in April that the sovereign wealth fund is “singled out” by U.S. regulators. “We thought we were friends,” he said after a meeting with officials in Washington. “All of a sudden, you’ve got people slapping you in the face and telling you, ‘OK, we don’t like you.’ ”
It’s not healthy for anyone when the talk gets this heated. The point of the negotiations is to regularize the dealmaking and reduce friction. A bilateral investment treaty “would set a positive tone,” former Treasury Secretary Henry Paulson said in a statement. David Marchick, a managing director at Carlyle Group (CG) and co-author of U.S. National Security and Foreign Direct Investment, says he hopes and expects that U.S. resistance to Chinese acquisitions will diminish over time. “It will be less interesting and less newsworthy because it will be part of what people will expect,” he says.
But the opposite is also possible—that Americans’ concerns will grow as the trickle of Chinese money becomes a torrent. Hoovering up Treasuries is one thing; large-scale acquisition of factories, labs, mines, and farms is quite another. Bremmer, an expert on China’s state capitalism, says the upside is that China “will have a stake in our economy doing well.” The downside, he says: “With every company they purchase, every piece of technology they get, the Chinese will be able to tip the playing field in a way that will really hurt the operations of American multinational corporations.”
On both sides, certain sectors will remain closed to investment. Let’s be clear, too, that a big source of this problem is the merchandise trade imbalance, which reached a record $315 billion last year. The U.S. should keep pushing China to buy American products instead of saving up to buy the companies that make them. But nothing can change the reality that China and the U.S. are rivals. The Obama administration is right to encourage more Chinese investment in the U.S.—but it would do well to be careful what it wishes for.
JUM’AT, 09 AGUSTUS 2013 | 11:20 WIB
Pertumbuhan Cina Membaik Katrol Indeks Asia
TEMPO.CO, Bangkok – Tanda-tanda bahwa perlambatan pertumbuhan ekonomi Cina akan keluar dari posisi terrendahnya, membantu mengangkat pasar saham Asia pada Jumat 9 Agustus 2013. Sehari sebelumnya, data bea cukai Cina menunjukan ekspor dan impor Cina meningkat pada bulan Juli.
Penguatan itu mengalahkan ekspektasi dan mengurangi kekhawatiran atas perlambatan pertumbuhan ekonomi Negeri Tirai Bambu yang mengakibatkan pertumbuhan ekonomi dunia melambat.
Harga produsen untuk sejumlah komoditas turun pada bulan Juli, tetapi pada tingkat yang lebih lambat dari bulan sebelumnya. Hal ini menandakan permintaan akan menguat setelah adanya kemerosotan berkepanjangan. Adapun para analis berharap tingkat produksi industri dan angka penjualan ritel untuk bulan Juli yang akan dirilis nanti, diharapkan dapat lebih stabil atau sedikit meningkat. Sementara itu inflasi harga konsumen tetap stabil.
“Kombinasi antara angka aktivitas yang lebih tinggi dari yang diharapkan dengan tekanan yang lebih rendah terhadap harga akan menjadi sentimen positif untuk Cina serta pasar di negara-negara berkembang,” ujar analis Credit Agricole CIB Hong Kong, seperti dikutip Associated Press.
Adapun pada pembukaan penutupan pasar Kamis 8 Agustus 2013, indeks Nikkei 225 Jepang naik 0,6 persen menjadi 13,687.44. Indeks Kospi Korea Selatan naik 0,1 persen menjadi 1,886.23. Hong Kong Hang Seng naik 0,4 persen menjadi 21,741.04. Sementara Australia S & P / ASX 200 turun 0,3 persen menjadi 5,049.40, akibat adanya kerugian di sektor perbankan.
Sementara harga indeks saham di Cina Daratan naik, di Taiwan dan Selandia Baru justru turun. Sedangkan pasar di Singapura, Malaysia, Indonesia dan Filipina tutup karena hari libur Idul Fitri.
Di Wall Street, indeks Dow Jones Industrial Average naik 0,2 persen, ditutup pada 15,498.32. The S & P 500 naik 0,4 persen menjadi 1,697.48. Indeks komposit Nasdaq naik 0,4 persen menjadi 3,669.12.
AP / PRAGA UTAMA
Setelah 3 Hari Rontok, Wall Street Berhasil Bangkit
Wahyu Daniel – detikfinance
Jumat, 09/08/2013 10:29 WIB
New York – Saham-saham di bursa Wall Street AS berhasil bangkit setelah 3 hari jatuh di awal pekan ini. Kenaikan indeks-indeks saham utama di Wall Street terdorong oleh menguatnya data perdagangan China, dan membaiknya sentimen terhadap ekonomi Eropa.
Pada perdagangan Kamis (8/8/2013), indeks Dow Jones Industrial naik 27,65 poin (0,18%) ke level 15.498,32. Sementara indkes S&P500 naik 6,57 poin (0,39%) ke level 1.697,48. Sementara indeks Nasdaq Composite naik 15,12 poin (0,41%) ke level 3.669,12.
Presiden Direktur Hugh Johnson Advisors Hugh Johnson mengatakan, pasar saham melompat karena kejatuhannya sudah cukup dalam. Selain itu, data perdagangan China untuk Juli menunjukkan laju ekspor meningkat 5,1% dibandingkan periode yang sama tahun sebelumnya. Sementara impor naik 10,9% dibandingkan periode yang sama tahun sebelumnya.
Dikutip dari AFP, Jumat (9/8/2013), saham-saham yang naik tinggi di antranya adalah saham Microsoft yang naik 2,6%. Saham produsen mobil listrik yaitu Tesla juga 14,3% setelah secara mengejutkan berhasil meraup keuntungan.
China trade growth supports shares, dollar weak
By Richard Hubbard
LONDON (Reuters) – Strong trade data from China eased concerns about the global economic outlook on Thursday, supporting European and Asian shares and giving the battered Australian dollar a boost.
The better tone ended three days of steady falls in MSCI’s world equity index .MIWD00000PUS caused by expectations the Federal Reserve could soon start to wind down its stimulus program, which has driven this year’s rally in stocks.
“A lot of risk assets over the past few weeks have been on a negative trend, and I think a few people are thinking this Chinese data is an opportunity to buy,” said Angus Campbell, market analyst at FXPro.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.8 percent after the Chinese data, recovering more than half of Wednesday’s losses, while Europe’s shares .FTEU3 edged up about 0.1 percent in early dealing.
A rise in German exports for June, coming after startling jumps in industry orders and factory output, added to the steadier tone and raised hopes Europe’s largest economy could record a bounce in growth.
“Exports are likely to rise more strongly in the second half of the year because euro zone countries such as Italy and Spain will have stabilized, said Alexander Koch, an economist at UniCredit Group.
With the Chinese data raising hopes of better demand for raw materials, the commodities-linked Australian dollar rose 0.9 percent to $.09073 and copper hit its highest in nearly two months
The U.S. dollar languished at a seven-week low against a basket of major currencies as yields on Treasury bonds eased back from highs reached on talk the Fed may begin to trim its bond purchases as early as next month.
Investors have been betting the Fed would be well ahead of other central banks in scaling back its easy money policy, but inconclusive economic data and mixed comments from Fed officials in recent weeks mean the timing of the move is still unclear.
The dollar index .DXY dropped to 81.167, bringing its losses to 4 percent in just a month while the euro rose to a seven-week high of $1.3353.
Ten-year German bond yields eased in line with the U.S. Treasury market moves, dipping 2.2 basis points to 1.67 percent.
Traders said news out of Japan was also supportive of euro zone government debt, analysts said.
Japanese investors piled into foreign bonds in July, making their biggest net purchase in three years – early evidence that Prime Minister Shinzo Abe’s expansionary policies are having the desired effect.
(Editing by John Stonestreet)
China’s exports improve in July
Updated: 2013-08-08 15:16
BEIJING — China’s exports went up 5.1 percent year on year to $185.99 billion in July, recovering from a tumble in June, according to data on Thursday.
Imports also rebounded last month, gaining 10.9 percent to $168.17 billion, the General Administration of Customs said in a statement.
Total foreign trade grew 7.8 percent in July from a year earlier to $354.16 billion, after it recorded a year-on-year decline of 2 percent in June.
The trade surplus narrowed by 29.6 percent year on year to $17.82 billion last month, as import gains outpaced export gains, customs data showed.
Liu Ligang, chief greater China economist at ANZ Banking Group, said the country’s foreign trade improved in July mainly due to a low base figure in the same period last year, more credit support to foreign trade companies, and a recent recovery in the United States and the European Union (EU).
In July, two-way trade with the EU and the United States rose 5 percent and 10 percent over a year earlier respectively, as compared with a year-on-year drop of 5.4 percent and 8.3 percent respectively with the two economies in June.
Lian Ping, chief economist at the Bank of Communications, said western importers have started making orders for the Christmas season, which drove up China’s July exports. August exports are expected to rise as well.
Previously-released July’s purchasing managers’ index for the manufacturing sector reinforced the positive signs of Thursday’s export figures.
Data from China Federation of Logistics and Purchasing showed that the sub-index for new export orders was up by 1.3 percentage points from June to 49 percent in July.
Zhang Liqun, an analyst with the Development Research Center of the State Council, said market expectations for China’s stabilized economic growth have been strengthening and exports are expected to improve slightly in the second half.
The country set the target to achieve an 8-percent increase in foreign trade this year. Despite difficulties, Commerce Minister Gao Hucheng recently expressed confidence to meet the aim.
Zhuang Jian, an Asian Development Bank economist, expected China’s foreign trade to perform better in the second half, but said great difficulties and uncertainties still lie ahead.
16. July 2013, 8:36:08 SGT
Permintaan Real Estate Cina Masih Tinggi
oleh Esther Fung
SHANGHAI—Sektor real estate Cina terus menunjukkan penguatan pada semester pertama 2013 dengan tingginya permintaan akan rumah di tengah upaya pemerintah mengendalikan pasar dan pertumbuhan ekonomi yang melambat.
Total investasi properti di Cina pada semester pertama 2013 naik 20,3% dibandingkan dengan tahun sebelumnya menjadi 3,68 triliun yuan ($599,3 miliar), demikian data dari Biro Statistik Nasional Cina. Sementara itu, pada lima bulan pertama 2013, tingkat pertumbuhan mencapai 20,6%.
Biro tersebut tidak merilis data bulanan.
Penjualan properti perumahan dan komersil tercatat sebesar 3,34 triliun yuan pada periode Januari hingga Juni atau naik sebesar 43,2% dibandingkan tahun sebelumnya. Total penjualan mencapai 2,59 triliun yuan pada lima bulan pertama yang berakhir Mei atau naik sebesar 52,8%.
“Ada stagnasi tingkat persediaan di kota-kota besar, jadi kami yakin mengenai dimulainya pembangunan dan berharap pertumbuhan pada bagian pasar itu mencapai 5% hingga 7% tahun ini,” ujar Johnson Hu, pengamat dari CIMB Securities.
Kenaikan itu terjadi meskipun pemerintah telah melakukan pengendalian harga real estate dalam tiga tahun terakhir di tengah ketakutan bahwa biaya perumahan yang kian tinggi dapat berujung pada gejolak sosial. Sejumlah upaya pemerintah untuk mengendalikan harga telah dilakukan diantaranya melalui pembatasan pembelian rumah, mengurangi kredit pengembang dan memperketat persyaratan uang muka.
Para pengembang lebih besar telah membeli lahan di kota-kota strategis yang dikenal dengan kota tier satu dan tier dua. Ekspektasi pasar dan permintaan rumah dari para pendatang terus terjaga seiring dengan program pemerintah mempercepat urbanisasi. Para pengembang biasanya membeli lahan dan menumpuknya untuk kepentingan pengembangan ke depan.
“Meskipun masih belum ada kejelasan pada situasi makro dan tingkat kredit, kebanyakan pengembang yang kami ajak bicara pada pekan lalu masih memiliki rencana agresif untuk menumpuk lahan” pada semester kedua tahun ini, ujar ahli dari Credit Suisse, Jinsong Du.
Para analis mengatakan ada penerimaan pada lingkungan kebijakan di pasar perumahan meskipun pemerintah berupaya menjaga kenaikan harga rumah.
Pasar pun tidak bereaksi terhadap arahan dari Dewan Negara Cina, atau kabinet yang memerintahkan pemerintah lokal untuk secara ketat memberlakukan pajak keuntungan rumah kedua sebesar 20%. Sejauh ini, Beijing menjadi satu-satunya kota yang menerapkan pajak itu.
Banyak pemain yang kini bertaruh bahwa para penyusun kebijakan terpaksa akan mengakui terbatasnya kenaikan harga rumah khususnya setelah perekonomian mengalami perlambatan.
Namun, di tengah sejumlah kabar baik, ada sejumlah hal yang patut dicermati. Jika Beijing terus memberlakukan pembatasan kredit di sistem perbankan, hal tersebut akan berpengaruh terhadap penjualan rumah, ujar Hu dari CIMB.
“Para pengembang properti mengatakan perbankan membutuhkan waktu lebih lama memberi persetujuan kredit,” ujar Hu. Menurutnya, butuh enam hingga delapan minggu untuk mendapatkan persetujuan. Padahal, pada awal tahun, persetujuan diberikan setelah empat hingga enam pekan. “Tapi, situasi tahun 2011 takkan berulang. Saat itu, butuh tiga bulan atau lebih untuk mendapatkan persetujuan.”
15. July 2013, 13:14:56 SGT
Efek Pelemahan Ekonomi Cina
oleh Alex Frangos di Hong Kong dan Eric Bellman di Jakarta
Seiring dengan melambannya pertumbuhan ekonomi Cina, sejumlah sektor industri dunia—mulai dari pabrik pisau di Jerman hingga perkebunan kelapa sawit di Sumatra—harus menghadapi peta ekonomi yang berubah.
Sejumlah industri yang sebelumnya banyak diuntungkan oleh tingginya pertumbuhan ekonomi Cina kini menghadapi masalah. Yang lain, dengan membidik 1,3 miliar konsumen Cina, bernasib lebih baik.
Pertumbuhan di Cina mulai melamban setelah mencapai puncaknya pada 2007. Namun, perlambatan itu akhir-akhir ini semakin tajam.
Data produk domestik bruto Cina triwulan kedua yang dirilis pada Senin menunjukkan bahwa perekonomian negara tersebut melaju 7,5% dari tahun sebelumnya. Hasil ini lebih lambat dari pertumbuhan kuartal kedua yang mencapai 7,7%.
Angka itu sesuai dengan target pertumbuhan pemerintah setahun penuh sebesar 7,5%. Persentase itu akan menjadikan pertumbuhan ekonomi Cina tahun ini sebagai yang terlamban sejak 1990. Beberapa ekonom bahkan menduga Cina akan tumbuh lebih lambat dari level tersebut.
Maruli Sitorus, 40 tahun, pemilik ladang perkebunan kelapa sawit di Sumatra Utara, mengatakan pendapatannya berkurang separuh dari raihannya tahun lalu karena harga minyak sawit jatuh. “Jelas bahwa lemahnya permintaan dari Cina mempengaruhi kami,” ujarnya.
Cina mencoba melakukan penyeimbangan ulang. Negara tersebut berupaya tidak terlalu bergantung kepada sektor konstruksi dan industri berat dan lebih menekankan perhatian pada belanja konsumen. Hal tersebut memicu optimisme dari sejumlah industri seperti otomotif dan makanan.
Guna mendongkrak konsumsi domestik, pemerintah Cina telah menaikkan upah minimum dengan harapan dapat meningkatkan penghasilan penduduk. Beijing juga memperlonggar kendali suku bunga guna meningkatkan hasil bunga bagi penabung rumah tangga. Pemerintah Cina pun telah mengalihkan keringanan pajak dan insentif lahan untuk industri yang melayani konsumsi domestik, seperti makanan dan kendaraan. Keringanan bagi industri berat yang mengalami kapasitas berlebih, seperti pembuatan baja dan kapal, mulai dikurangi.
SK Group dari Korea Selatan bulan ini menandatangani perjanjian senilai $160 juta guna membentuk usaha patungan baterai mobil listrik di Beijing. “Kebanyakan proyek kami di Cina ditujukan bagi konsumen Cina, bukan mengekspornya kembali ke negara lain,” ujar juru bicara SK Group, Jung-min Yoo. “Kami akan mendapat untung dari model pertumbuhan baru Cina.”
Pertumbuhan ekonomi Cina tercatat masih kuat ketimbang negara lain. Namun, tingkat pertumbuhan satu digit yang tercatat saat ini jauh menurun ketimbang pencapaian 2007 sebesar 14,2%.
More In ekonomi & bisnis
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Kenaikan BI Rate Sanggup Atasi Inflasi
Perlambanan ekonomi ini paling terasa oleh produsen barang komoditas, sektor yang paling mendapat untung dari booming ekonomi Cina. Studi Standard & Poor’s pada lebih dari 90 perusahaan terbesar Cina menunjukkan bahwa perusahaan-perusahaan tersebut akan memangkas total belanja modal untuk pertama kalinya dalam setidaknya 10 tahun terakhir. Investasi pada pabrik, rantai produksi, fasilitas peleburan logam, dan jaringan telekomunikasi cenderung menciptakan permintaan besar atas bahan baku yang diimpor Cina.
Maruli, pemilik 25 hektar lahan perkebunan kelapa sawit, harus mengurangi jumlah karyawannya dari 12 orang menjadi 6 orang. Ia juga harus menunda pemupukan lahan dan perbaikan truk. “Saya harus benar-benar berhemat dan tak lagi mempertimbangkan membeli sepeda motor atau mobil baru,” ujarnya.
Jika ekonomi Cina sedang “pilek,” semakin banyak negara yang ikut terpengaruh. Klik untuk melihat grafik yang lebih besar.
Kelesuan ekonomi Cina juga berpengaruh bagi Anthony Walsh. Ia adalah direktur pelaksana Ausco Modular, sebuah perusahaan Australia yang membangun perkemahan sementara bagi pekerja tambang di beberapa tempat seperti Karratha, kota pertambangan di pesisir barat laut Australia.
“Jika ada satu kamar kosong di Karratha, 12 bulan lalu kamar ini akan terisi dalam hitungan detik,” ujarnya. Dulu, kamar-kamar kos penuh dihuni penambang dari wilayah timur Australia. Kini, seperlima dari total kamar masih kosong. Tingkat sewa hunian turun 20%.
“Kenyataannya, lonjakan permintaan sumber daya alam dari Cina telah berakhir,” ujar perdana menteri Australia, Kevin Rudd, dalam sebuah pidato hari Kamis. Tingkat pengangguran di Australia, negeri raksasa pertambangan dunia, kini mencapai 5,7% atau tertinggi dalam empat tahun.
Di saat kelambanan pertumbuhan Cina merugikan negara seperti Australia, harga energi dan bahan mentah bagi negara-negara lainnya justru lebih rendah. Hal ini dapat mengurangi inflasi, sehingga memungkinkan sejumlah bank sentral merangsang ekonomi negaranya yang tengah lesu.
Distrik finansial di Shanghai, Cina.
Di sisi lain, produsen barang-barang konsumen – peralatan rumah tangga, pakaian, makanan, dan sejenisnya – serta pemasok peralatan canggih ke perusahaan kini lebih fokus kepada warga Cina, yang semakin gemar belanja dan kini lebih makmur. Dienes Group asal Cologne, Jerman, adalah produsen pisau yang digunakan dalam beberapa mesin seperti pemotong kertas. Penjualan ke Cina telah naik tiga kali lipat dari 10 tahun lalu menjadi sekitar 3 juta euro.
Cina kini menyumbang hingga 8% dari total pendapatan Dienes Group yang sebesar 40 juta euro. “Asalkan mereka tidak sepenuhnya bangkrut, produk domestik bruto per kapita Cina akan meningkat dan melahirkan lebih banyak permintaan,” ujar Bernd Supe-Dienes, managing partner Dienes Group.
Di Afrika Selatan, permintaan Cina untuk mineral krom dan mangan menurun. Namun pemerintah setempat berharap hal ini akan ditambal oleh kenaikan permintaan makanan. “Kini kami lebih tergantung kepada suasana perut [Cina] saat mereka bangun di pagi hari,” ujar Theo de Jager, deputi presiden Agri SA, asosiasi petani di Afrika Selatan.
Amerika Serikat sendiri tidak merasakan kelesuan Cina, lantaran permintaan untuk beberapa produk ekspor utama ke Cina—pesawat dan produk komputer berteknologi tinggi—masih kuat.
Cina diprediksi menyumbang 13% dari total aktivitas ekonomi global tahun ini, lebih tinggi dari 5% pada 2006. Jadi meskipun pertumbuhannya melamban, efek Cina di dunia masih signifikan.
—Dengan kontribusi dari Tom Orlik, Patrick McGroarty, Rhiannon Hoyle, George Nishiyama, In-Soo Nam, Brenda Cronin, dan Brian Blackstone.
Prepare for the next crash right now
July 15, 2013, 4:00 PM
By CODY WILLARD
Look at what’s dominating today’s market headlines:
U.S. stocks hold line after record climb
Stocks edge higher, extending a hot start to July
6 Stock That Stand Out in Today’s Sizzling Stock Market
Citi, Boeing, Leap on the rise
And best of all, our quote of the day:
The ‘Bernanke Put’ is Back in Play – ”The phones have been crazy,” says William Lefkowitz, options strategist at asset management and brokerage firm National Securities. “People are excited after the Bernanke comments.”
The headlines are full of euphoria, excitement and talk of bullish stock moves. Hmm.
Here are some headlines from this time last year:
The 2013 Fiscal Cliff Could Crush Stocks
The Next Stock Market Crash Will Be Bigger Than “Black Monday
The Stock Market Is Crashing!
Back when stocks were 20%-30% lower than where they are now, the headlines were full of fear, panic and talk of market crashes.
Meanwhile, here’s what I was saying back then while panic and fear dominated the headlines:
“I’ve said from the beginning when the idiot mainstream media started biting on this fiscal-cliff stuff that we should buy panics over it when it dominates the headlines and sell euphoria when a supposed resolution is dominating the headlines. That’s still the playbook.”
“So let the government continue to spend as much of our and our future generation’s money on blowing up asset bubbles and ensuring record corporate earnings and margins and share of GDP as they possibly can while they play their faked debt and deficit concerns with these repeated updates, speeches, and leaks about the fiscal cliff dead horse, the endless Euro debt crisis, social welfare austerity, and so on. We’ll just have to continue to follow our playbook of buying the panics and selling the spikes as long as the asset bubble blowing business booms like it is.”
I wrote an article last summer called, The Catalyst for the Next Market Crash. Do you remember what I said would be a real reason to get concerned about the stock market crashing? Higher interest rates. Hmm.
The biggest worry of most investors and traders and the favorite potential catalyst for most bears is of course the ongoing EU crisis. Is it a solvency or a liquidity crisis? It’s both! The European banks are illiquid and capital is sticky because the banks are insolvent because they lent too much money to Greece and Spain and Italy at historically unheard of low rates and most of that money had for decades been funneled to special interests and fomenting real estate bubbles for people rich enough to own real estate.
My biggest worry has nothing to do with Greece or Spain or the eventual collapse of the Euro as a fully-functioning, inter-state currency. Rather, as I’ve many times explained — the markets are all DOWN since the EU and euro came into existence in the late 1990s. The bull market and the U.S. economy had boomed for 25 years before the EU/euro came to be.
But the thing that will likely crash the stock markets next is when the U.S. Treasury interest rates start to return to something more normal and reflective of the true cost of capital, which has never been and never will be less than 1% for an extended period of time. There is risk to lending people and nations money and that risk must be compensated at a reasonable rate … and eventually lenders to the U.S. government will expect reasonable compensation.
All right then, let’s tie all this together and make some conclusions and some corresponding moves in the portfolio. If the playbook is to buy the crashes and the panics and to sell the euphoric highs, and if stocks are at euphoric highs, and if the biggest catalyst for a bigger problem and/or even a crash in the stock markets is higher rates, and if rates have been spiking in the last few weeks/months — then what would the right move be right now?
If you answered “Sell/trim some stocks” and if you were steady enough at the lows to have been buying stocks, then give yourself a huge pat on the back.
And the point of all this is of course to prompt you and I to take action and actually follow through on the trimming and selling again while we’re at these euphoric new highs and while rates are in an up trend. Don’t panic, don’t sell it all. Just take profits and keep raising cash while the stocks are up and then you’ll be ready and flexible for the next move, whether the markets are higher or lower from here this time next year.
I’m going to trim down some of my longs again today, including the Google and Amazon purchases I outlined back in the days of panic last year for you dear readers of the Cody Word here on Marketwatch.
July 14, 2013, 11:11 p.m. EDT
China economy slows as forecast; stocks gain
By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — China’s economic growth slowed to 7.5% in the second quarter compared to a year earlier, the National Bureau of Statistics said Monday, with stocks gaining as the result matched expectations despite fears to the contrary.
While the gross domestic product result was down from the first quarter’s 7.7% advance, it matched projections from separate Dow Jones Newswires and Reuters surveys of economists. That level of 7.5% is also the government’s official growth target for the year.
While the GDP number may have offered relief for those expecting a sharp downside miss for the data, some economists said the result was a sign of trouble.
“As of now, China’s GDP has been staying under 8% for five straight quarters, a clear sign of distress,” wrote IHS senior economist Xianfang Ren.
‘Breakthrough’ in U.S.-China trade?
Is the talk of a breakthrough in U.S.-China trade negotiations just talk?
“We are especially concerned about the rather significant downslide of investment growth, led by real-estate investment. Construction sector could see lots of headwinds coming forth in the second half, if there is no marked change in policy course,” Ren wrote.
Chinese stocks had lost ground Friday after the state news agency Xinhua quoted the finance minister as saying growth could likely average just 7% this year. However, Xinhua corrected the report Saturday, saying Finance Minister Lou Jiwei had in fact predicted 7.5% expansion for 2013.
Unlike during other recent slowdowns, China’s new government has indicated it plans to focus more on economic reforms than on short-term stimulus. However, some analysts have said Beijing may offer some policy support if growth slows considerably.
“Most people see downside risk” for the second half of the year “and wonder if Premier Li [Keqiang] will defend the annual 7.5% growth target,” wrote Bank of America Merrill Lynch strategist Ting Lu.
“Despite many noises, we believe Premier Li will try to achieve the 7.5% growth target for 2013 (and will very likely lower the growth target to 7.0% for 2014) and will take some actions. We’d like to reiterate our call of a ‘Li Keqiang Put,’ which means that in the first couple of years of Premier Li’s term, he may try to prevent a growth hard-landing and a financial crisis,” Lu wrote following the data.
Other numbers mixed, but markets gain
Other statistics out Monday offered a more mixed picture.
Industrial production for June rose 8.9% from year-ago levels against, slowing from May’s 9.2% growth, and coming in below the Reuters projection for a 9.1% gain.
On the other hand, June retail sales rose 13.3% on an annual basis, beating May’s 12.9% increase to extend an upward trend for the data point.
Urban fixed-asset investment — watched as an indicator of construction spending — grew an average 20.1% in the January-June period, just short of Reuters’ 20.2% projection and down from 20.4% in January-May. Fixed-asset investment is reported on a year-to-date basis.
Chinese stock markets moved higher after the data, with Hong Kong’s Hang Seng Index (HSI:HK:HSI) rising 0.4% after briefly turning lower ahead of the numbers.
The Shanghai Composite Index (SHA:CN:SHCOMP) saw some volatility immediately after the numbers, eventually edging 0.6% higher.
The Australian dollar (ICAP:AUDUSD) — often sensitive to the economic outlook in China, Australia’s top trading partner — saw limited reaction to Monday’s release. The currency initially lost some ground, but recovered to 90.91 U.S. cents, marginally lower from 90.94 cents ahead of the data.
But Australian stocks enjoyed a bounce, with Sydney’s benchmark S&P/ASX 200 (ASX:AU:XJO) also erasing losses before the data release to swing 0.3% higher, as some of the mining heavyweights shed losses in the wake of the numbers.
July 12, 2013, 1:03 a.m. EDT
China finance minister tips below-target growth
Suggests reform more important that meeting GDP goal
By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — Chinese Finance Minister Lou Jiwei suggested his nation’s economy will fall short of its targets, saying Thursday that the growth rate will likely average 7% this year, according to a state media report.
Chinese Finance Minister Lou Jiwei, in a file photograph.
Such a result would come in below the government’s 7.5% target and would mark a slowing from 7.7% growth reported for the first quarter of this year.
However, Lou also said the economy would not suffer a so-called “hard landing” and that the slower growth was necessary for the reforms that the government is undertaking to further open up the economy and move away from dependence on exports, according to the Xinhua news agency.
Additionally, Bloomberg News quoted Lou as saying: “We don’t think 6.5% or 7% will be a big problem,” but adding that reaching 7% for 2013 “won’t be much of a problem.”
For China’s gross domestic product grow 7% for the year, growth in the second through fourth quarters would need to average under 6.8%.
The nation is due to report second-quarter GDP on Monday, with a Reuters survey of economists showing a median expectation of 7.5% growth.
Speaking in Washington on the sidelines of the just-concluded U.S.-Chinese summit there, Lou reportedly said: “Despite the slowdown of China’s economic growth rate, the structural reform is paying off.”
Chinese stocks traded lower Friday, with Hong Kong’s Hang Seng Index (HSI:HK:HSI) ending the morning session down 0.4%, while the Shanghai Composite (SHA:CN:SHCOMP) entered the midday break 0.5% lower.
July 10, 2013, 6:08 p.m. EDT
Bernanke stresses rates to stay low for long time
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve will not be in a hurry to raise short-term interest rates, even after the unemployment rate comes down markedly, Chairman Ben Bernanke said Wednesday.
The Fed has set an unemployment rate threshold of 6.5% for the first rate hike from the current near-zero levels that have been in place since December 2008. The central bank has gone to great pains to stress that this tool is separate from the bond-buying program. The jobless rate was 7.6% in June.
Bernanke said the central bank will be in no rush to hike rates once the threshold is reached.
“There will not be an automatic increase in interest rate when unemployment hits 6.5%,” Bernanke said in the question-and-answer session of a speech to economists.
Bloomberg Enlarge Image
Ben S. Bernanke, chairman of the U.S. Federal Reserve, in June
Given the weakness of the labor market, and low inflation “it may be well sometime after we hit 6.5% before rates reach any significant level,” Bernanke added.
U.S. stock futures rose on the comments, with the S&P 500 SPU3 +0.87% contract tacking on about 0.7%.Read After Hours column for more markets coverage.
The Fed chairman drew a clear distinction between asset purchases and rate hikes.
The purpose of the asset purchases is to give the economy some forward momentum, Bernanke said.
Ian Shepherdson, chief U.S. economist at Pantheon Macroeconomics, said he was sticking with his forecast of a September tapering after Bernanke spoke.
Bernanke did make some fairly dovish comments.
He said that it is too early to tell if the economy had weathered the headwinds from fiscal policy and said the U.S. still faces “significant risks”
He also said that the unemployment rate probably understates the weak condition of the labor market.
And he stressed that the Fed was concerned about the current very low inflation rate.
If inflation does not move up closer to the central bank’s 2% target, “that would be a good reason to remain accommodative,” he said.
SPU3 1,663.00, +14.40, +0.87%
S&P 500 futures
Bernanke defended his decision to lay out a potential timetable for winding down asset purchases after the Fed’s last meeting.
The Fed chairman said the central bank could start winding down its $85 billion a month bond-buying program later this year and end it altogether by mid-2014.
“Notwithstanding some volatility that we’ve seen in the last six weeks, speaking now and explaining what we are doing might have avoided a much more difficult situation,” he said.
If financial conditions tighten too much to jeopardize the Fed’s goals, “we would have to push back,” he said.
At the moment, “with some luck,” positive factors will generate faster growth and labor market improvement through the rest of the year, he said.
Bernanke spoke after the central bank released the minutes of the Fed’s last policy-making meeting.
The minutes show a wide range of views among the central bankers on when to start to wind down the asset purchases.Read more on the Fed minutes.
But about half of the Fed’s top 19 officials said it would be appropriate to end the asset purchase plan late this year.
Greg Robb is a senior reporter for MarketWatch in Washington. Follow him on Twitter @grobb2000.
Ten days in June
How will China’s lenders respond to the Shibor shock?
Jul 6th 2013 | Hong Kong |From the print edition
DURING last month’s cash crunch, China’s banks struggled desperately to work out what the country’s central bank was thinking. As the cost of interbank borrowing rose to record levels, they wondered how the People’s Bank of China (PBOC) would respond. The answer was: belatedly and fitfully. Now the banks must decide on their own response.
As rates ease, the fog enshrouding the central bank’s intentions is beginning to clear. In addition to its public statements, a summary of a private PBOC meeting was leaked to the Wall Street Journal. It conveyed the central bank’s alarm at an apparent surge in lending in the first ten days in June, when China’s banks added almost 1 trillion yuan ($163 billion) to their loan books, more than they typically lend in a whole month (see chart). Such an expansion of credit “had never been seen in history,” the summary said.
The PBOC concluded that some banks were expecting a fresh government stimulus to revive a slowing economy and had “positioned themselves in advance”. That meeting, which took place on June 19th, helps explain why the central bank failed to act the next day even as overnight interbank borrowing rates exceeded 25%.
The PBOC may, however, have misread the banks’ intentions. Almost 70% of the 1 trillion yuan in new loans were “discounted bills”, according to other news reports. These are short-term loans that grease the wheels of commerce, filling the gap between the sale of a piece of equipment, say, and payment for it. Banks can package them into investment products, or pledge them as collateral for an interbank loan. But in so doing these bills are sometimes smuggled off banks’ balance-sheets, helping them dodge regulatory limits on how much lending they can do.
In the first ten days of June many of these hidden bills suddenly resurfaced, reckons Winnie Wu of Merrill Lynch. They became visible after the regulator tightened up accounting at the smaller, lightly audited banks where the bills would often go to disappear. If Ms Wu is right, then the supposedly historic lending surge that so rattled the central bank was no such thing. Banks were not pushing new loans in defiance of central-bank guidelines. They were instead recognising existing loans in deference to the regulator’s instructions.
The central bank may have both overreacted to the June lending figures, therefore, and then underreacted to the subsequent cash crunch. How will the banks themselves now react? In the past few weeks they were too busy to think, Ms Wu says. But now they will have to think about longer-term fireproofing. Their discounted-bill business has clearly fallen into disfavour. They will also have to rethink two related businesses: wealth-management products and interbank claims.
Wealth-management products raise money, mostly from better-off individuals, for fixed periods (often less than six months). The cash is invested in a variety of assets, some of them riskier than others. These products added to the cash crunch, because they often matured before the underlying assets did. The banks grew used to borrowing money in the interbank market to redeem maturing products until they could sell new ones. In future they are likely to sell fewer products, at longer maturities, backed by more liquid assets.
Similar worries will curtail banks’ lending to other banks. These interbank claims rose quickly in the past year, especially among smaller institutions. Such transactions were sometimes used to remove assets from banks’ balance-sheets, helping them to meet rules on loan-deposit ratios and capital.
Under old rules banks did not have to attribute much capital to an interbank loan. The Basel 3 accords that China began to implement this year raise the amount of capital a bank has to have for such claims. Chinese banks were already preparing to curb these assets. After last month’s interest-rate shock, they will do so urgently.
A tightening of reckless credit is necessary in China. But Ms Wu worries that the banks’ response may hurt private firms, especially smaller companies, disproportionately. Large state-owned enterprises qualify for long-term loans and long-lived bonds. Not until they roll over these obligations will they feel the sting of dearer credit. Smaller firms, on the other hand, borrow at short maturities and frequent intervals. They need to raise working capital or to bridge the gap between making a sale and taking payment. For them, discounted bills are a big source of financing.
In its public statements since the cash crunch, the central bank has urged banks to lend more to the “real” economy and to small firms in particular. It has showed that it can cut off credit to banks that have enjoyed too much. But it has yet to prove that it can redirect credit to the firms and industries that have had too little.
From the print edition: Finance and economics the economist
June 19, 2013, 4:38 p.m. EDT
Fed tapering could begin later this year
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke said on Wednesday that the central bank may start to scale back its asset purchases later this year if the economy continues to strengthen as the central bank expects.
The Fed, which kept monetary policy on hold after a two-day meeting, signaled greater optimism about the economy, forecasting that the unemployment rate could fall to 6.5% by 2014, one year sooner than the central bank had previously estimated. Read MarketWatch’s blog of the Fed announcement and Bernanke press conference.
The Fed’s newly revised forecast and Bernanke’s comments slammed U.S. financial markets. Stocks on Wall Street ended sharply lower and the 10-year Treasury yield (10_YEAR +7.76%) surged to 2.33%, its highest level since March 2012.
The central bank’s $85-billion-a-month bond-buying program has helped prop up stock prices and keep U.S. interest rates ultra-low.
Federal Reserve Chairman Ben Bernanke speaks to the press Wednesday
Yet Bernanke, speaking in a press conference after the Fed meeting, also repeatedly stressed the bank will not start to scale back its asset-purchase program immediately once its economic targets are met. He said the bank has to be convinced the economic recovery is on a solid upward path before it starts to pull back.
“Our policy is in no way predetermined,” Bernanke said. “Our policies are tied to what’s going on in the economy.”
The bank probably won’t raise interest rates until well after it begins to taper bond purchases. The Fed has said it would keep rates close to zero so long as the jobless rate, now at 7.6%, was above its 6.5% threshold.
Indeed, 14 of the 15 Fed members don’t expect the first rate hike until 2015, according to the bank statement.
“The Fed is in no hurry to remove monetary accommodation, but as the downside risk to the U.S. economy and labor market diminish, the rationale for maintaining emergency quantitative-easing measures becomes harder to justify,” said Scott Anderson, chief economist of Bank of the West.
The Fed released its regular policy statement shortly before Bernanke’s news conference and the bank’s outlook showed subtle but important changes. The Fed said downside risks to the outlook have “diminished since the fall” and that the labor market had shown further improvement.
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The Fed didn’t seem worried about inflation even though the bank predicted the slowdown in inflation this year would be temporary. Fed officials trimmed their inflation forecast for 2013, as expected, but kept estimates for 2014 and 2015 steady at close to 2%.
In the statement, the Fed said inflation was low due to “transitory influences.”
The central bank also said the U.S. economy could expand faster than 3% in both 2014 and 2015.
China Alami Krisis Likuiditas?
Oleh: Wahid Ma’ruf
ekonomi – Senin, 17 Juni 2013 | 17:31 WIB
INILAH.COM, Hong Kong – Benarkah pasar keuangan China telah mengalami krisis likuiditas? Kekhawatiran terhadap terhentinya kebijakan stimulus moneter dari Fed diduga menjadi pemicunya.
Alasannya, pada lelang obligasi pemerintah China senilai US$2,45 miliar pada Jumat (14/6/2013) mengalami kegagalan. Kondisi ini untuk pertama kalinya dalam dua tahun terakhir. Apakah ini mencerminkan ketatnya pasar uang sebagai indikasi dalam waktu 7 hari telah meningkat menadi 7 persen. Padahal tahun lalu, tingkat rata-rata tahun lalu masih 3 persen.
“Kami harus berhati-hati dengan berita terbaru dari China dengan sistem keuangannya yang dapat membatalkan upaya Fed AS menjaga ketenangan pasar,” kata peneliti pasar global di ANZ, Richard Yetsenga seperti mengutip cnbc.com, Senin (17/6/2013).
Ekspektasi terhadap Federal Reserve AS untuk melanjutkan stimulus moneter secara agresif hingga akhir tahun ini kian besar. Sebab kekhawatiran stimulus terhenti telah memicu aksi jual di pasar global dalam beberapa pekan terakhir. Pada pertemuan pekan ini, Fed diperkirakan akan menggunakan momen tersebut untuk menenangkan kekhawatiran tersebut.
Tetapi likuiditas di sistem keuangan China masih terganggu. Sementara faktor musiman seperti hari libur nasional selama tiga hari pada pekan lalu dan pembayaran pajak swasta pada akhir Mei lalu juga telah memicu ketatnya pasar uang. Pada ekonom menilai tekanan terhadap sistem keuangan semakin meningkat.
Apabila pembuat kebijakan gagal melakukan ansitipasi maka risiko yang terjadi pada sistem keuangan dapat memicu risiko secara makroekonomi. Ekonom ANZ ini menyarankan Bank Rakyat China PBOC) menurunkan suku bunga.
The People’s Bank of China (PBOC), telah memberi toleransi dengan mengirim sinyal ke pasar tentang perkembangan likuiditas maka dalam waktu dekat akan terjadi pelonggaran moneter.
“Kami percaya dengna mata uang yang kuat dan aktivitas ekonomi yang lambat serta tekanan inflasi yang tebatas dapat menjadi alasan bagi PBOC memangkas suku bunga acuan sebesar 25 basis poin.
Dalam Ekonomi, China sudah Kalahkan AS
Oleh: Wahid Ma’ruf
ekonomi – Jumat, 14 Juni 2013 | 05:29 WIB
INILAH.COM, New York – Bertahun-tahun gemar perang, AS terkejut dengan perkembangan ekonomi di Asia, terutama China. Kenapa?
Saat ini, China terus berinvestasi untuk masa depan, menciptakan lapangan kerja, membangun infrastruktur, mengembangkan pendidikan dan teknologi serta meningkatkan PDB.
Bahkan mantan tentara AS dan anggota senator John McCain, mengakui dalam perak Irak menghabiskan US$3 triliun. AS memiliki jumlah tentara yang banyak dan mampu membuat kapal perang canggih. Tetapi infrasturktur hancur, sistem pendidikan dan lapangan pekerjaan terlupakan.
Dalam artikel yang dimuat marketwatch.com, Paul B Farrel, menilai Asia telah jalan cepat di depan AS dan memenangkan perang ekonomi. “Pada tahun 2015, PDB China akan meyalip Amerika,” katanya, Kamis (13/6/2013).
Dia menyayangkan sikap Kongres AS yang menolak menggerakan ekonomi yang menciptakan lapangan kerja. AS adalah musuh terburuk dalam perang ekonomi dalam sejarah dunia. Washington tanpa kompromi dengan obsesi penghematan padahal menekan pertumbuhan ekonomi AS. “Itu membunuh peran kami sebagai negara adidaya. Membunuh masa depan kita. Dan Asia menyukainya,” katanya.
Pada tahun 2049, PDB CHina mencapai 40% dari PDB dunia. Sementara PDB Amerika menyusut sampai 14 persen.
Dalam tulisan peraih nomel ekonomi, Robert W Fogel, China mencuri hal-hal terbaik dari sistem kapitalisme AS. China menjadi negara adidaya ekonomi baru. Pada tahun 2040 perekonomian China akan mencapai US$123 triliun. Atau hampir naik tiga kai lipat output ekonomi dunia tahun 2000 lalu.
Pendapatan per kapita China akan mencapai US$85 ribu lebih atau dua kali lipat dari perkiraan untuk Uni Eropa. China juga lebih tinggi dari India dan Jepang. “China yang masih menjadi negara miskin pada tahun 2000 akan menjadi negara superkaya di tahun 2040,” katanya.
Pendapatan per kapita AS mungkin masih lebih tinggi. Tetapi pangsa PDB China mencapai 40 persen dari dunia. Untuk AS 14% dan Uni Eropa hanya 5 persen untuk 30 tahun dair sekarang.
Amerika seakan menutup mata. Sementara Asia melaju tak terbendung. Amerika kalah perang. Asia tertawa dengan kondisi ini. Padahal telah menyabotase masa depan ekonomi AS secara nyata. Asia tidak hanya menyadari kondisi tersebut tetapi juga memanfaatkan kelengahan AS. Bahkan AS bisa kehilangan pengaruhnya dalam waktu dekat.
IMF menyebabkan Wall Street murung di akhir pekan
Oleh Dyah Megasari – Sabtu, 15 Juni 2013 | 09:40 WIB | Sumber Reuters
NEW YORK. BUrsa saham Amerika Serikat (AS) menutup akhir pekan di teritori negatif. Wall Street hanya sempat hijau di awal transaksi.
Dow Jones Industrial Average (DJIA) ditutup minus 105,9 poin atau 0,7% ke 15.070,18. Indeks S&P mundur 9,63 poin ke 1.626,73 dan bursa teknologi Nasdaq tenggelam 21,81 poin atau 0,63% ke 3.423,56.
Proyeksi International Monetary Fund (IMF) tentang ekonomi global yang lebih buruk membuat Wall Street muram.
IMF memproyeksikan pertumbuhan ekonomi pada 2014 hanya 2,7%, lebih rendah dari estimasi sebelumnya di level 3%, sementara tahun ini tetap sebesar 1,9%.
IMF juga membaca sinyal The Federal Reserve yang akan mempertahankan program pembelian obligasi setidaknya sampai akhir tahun ini. Dana moneter yang dipimpin Christine Lagarde itu meminta Bank Sentral AS berhati-hati dalam menjalankan rencana penghentian pembelian obligasi untuk menghindari guncangan pasar finansial.