Manufacturing in China contracted for a second month in August, according to the latest reading on the manufacturing PMI. The China Federation of Logistics and Purchasing Purchasing Managers’ Index registered a seasonally adjusted 48.4 in August, unchanged from July.
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Great acceptance speech preceded by a week full of inspiring speeches from Nancy Pelosi, Michelle Obama, Hillary Clinton, John Kerry, Bill Clinton, and Joe Biden. Unfortunately, the 4 references to China were negative. Here they are in order of most transparently about China to most opaquely about China, and oddly in the order they were delivered in the speech:
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China’s manufacturing contracted for a sixth consecutive month in January as shrinking global demand hit the country’s export-driven economy. The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 42.2 from 41.2 in December. Since any reading below 50 indicates contraction, even though the rate of contraction dropped (and has been dropping since November, see chart below) China’s manufacturing sector (and hence China’s economy) is still contracting. What we don’t know at this point is how quickly China GDP is contracting, we won’t know that till someone with the time and ingenuity devises a way to calculate a rough and ready quarter on quarter (seasonally adjusted) output indicator. Come on, be famous for a day, go out and do it (since the Chinese statistics office apparently have no interest in the matter), I would, but I simply don’t have the time, since Europe, not China, is my focus. However, on a rough and ready, back of the envelope, basis my guess is that this months Chinese reading may be equivalent to something like a quarter on quarter contraction rate of around 0.5%, which means that what we have at this point is a 2% annual contraction rate, but we really need to see some actual data to calibrate all this a bit better I think.
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Well China isn’t quite in Great Depression mode yet, but manufacturing activity - which forms the core of the Chinese economy and accounts for 43% of all activity - is already very close to a technical recession, and phew, it wasn’t very long ago that the Chinese economy was registering double digit growth. So the turn around is gigantic. The “close to technical recession in manufacturing industry” call comes from the people over at CLSA Asia-Pacific Markets, who compile the China purchasing managers index, and they base their judgement on the fact that their Chinese manufacturing index has now been registering contraction for five consecutive months.
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China’s trade surplus hit a record $29.3bn in September as exporters succeeded in defying forecasts of falling international demand – for the moment, at least.
Exports rose 21.5 percent from a year earlier to $136.4 billion after gaining 21.1 percent in August, according to data from the Chinese customs bureau. China has cut interest rates twice in the last month in an attempt to stimulate the economy as the worst financial crisis since the Great Depression undermines global growth. The surplus adds to the already existing $1.8 trillion of foreign-currency reserves.
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While listening to President George W. Bush give his speech at 7:45 this morning my email box started blowing up with some unusual emails from the State Department. Typically, my feed gets 3-5 emails a day. The typical subjects are new country notes, the daily press conference, and some new initiative or program. From 7:37 to 7:51 a series of emails with a scope of topics that normally don’t come in during the course of a week hit my box. Here’s the list:
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Thailand’s recent politics seems to have had even more drama than a Bollywood flick packed with thrills, chills and thrusts.
In a recent twist in Thailand’s politics, ousted prime minister Thaksin Shinawatra’s brother-in-law has been elected as the country’s fourth prime minister in two years. The election comes after the country declared emergency two weeks ago following mass demonstrations outside the prime minister’s office compound and the seat of government. Overcoming internal party politics, Mr Somchai won the parliamentary vote 298 to 163.
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The fallout from the collapse of Lehman Brothers caused panicked selling of banking shares on Tuesday throughout Asia, where many of the failed American company’s biggest creditors are based. Even as analysts and bankers said the effects of Lehman’s failure on Asian financial markets would be limited, the 158 year old investment bank closed operations in three of their Asian subsidiaries - Lehman Brothers Asia, Lehman Brothers Securities Asia and Lehman Brothers Futures Asia. The investment bank also ceased trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, but its asset management company, Lehman Brothers Asset Management is expected to continue operations as usual.
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Many know why, but I’m concerned that there are plenty more who don’t keep reading below the fold (or the headline).
I subscribe to the good ‘ole theory that humans are fundamentally concerned about their own self-preservation, but that evolution has shaped our society such that self-preservation is best achieved through cooperation and building strong relationships with others.
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Business immigration to the US is a creative field. Typically a lawyer’s advice will keep the creativity on the right side of the law. Sometimes the advice will put the lawyer and the client’s in a legal gray zone, witness Fragomen’s recent troubles. And there is always room for an entrepreneur to take the immigration into the fraud and conspiracy zone.
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