The People’s Bank of China (the Chinese Fed) cut it keylending rate by 27 basis points 5.31%. This is the fifth time since September thatChina has cut interest rates.
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From the monthly archives:
December 2008
We all know that Toyota makes great cars but they also make great profits. For the last 70 years in a row, Toyota hasmade money. Not anymore.
Toyota is forecasting that it will lose money in 2009 because of plunging demand and astrong yen.
“The tough times are hitting us far faster, wider and deeper than expected. [...]
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The dollar amount isn’t huge but the change in direction could be.
China reported that its cash horde of foreign exchange reservesdeclined from $1.906 trillion to $1.89 in September (most recent numbers).
That’s the first time since December of 2003 that China’s cash reserves have declined.
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The news has been filled with stories about tapped out consumers and weak holiday sales. The retail situation incouldn’t be more different.
The Chinese Ministry of Commerce reported that China’s retail sales broke the10-trillion-yuan (about $1.5 trillion U.S. dollars) for the first time, which works out to roughly a 21% increase overthe previous year.
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We’ve been enjoying lower fuel prices for several months, but the Chinese have been stuck at higher prices because theChinese government, not the free markets, control the price of fuel.
Fuel prices were cut yesterday. A14% for gas, 18% drop in diesel prices, and a 30% drop in jet fuel prices.
Hmmm. Maybe it is time to [...]
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Think the job situation is tough in the U.S.? It isn’t so rosy in China either.
I’ve also chronicled the surge in factory closures, leaving millions of factory workers out of work. According to theChinese Academy of Social Sciences, the urban unemployment rate is now 9.4%.
Even the highly educated are having a tough time. Chen Guangqing [...]
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The last time I was in Japan, I was getting about 115 yen for each of my American dollars. Today, the exchange rate hasfallen to 90 yen per dollar.
My next trip to Japan is going to cost more but what matters to us as investors is thatJapanese exports — Toyota, Sony, Komatsu — will be [...]
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China’s General Administration of Customs reported thatoil importsdropped to an average of 3.26 million barrels a day, a 17.3% decline from October.
That type of drop in demand with drastically cheaper gas prices indicates that things are really slowing down inChina.
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Year-over-year electricityproduction dropped by 11% in November, a very clear sign that industrial activity is falling pretty fast.
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These are some of the most worrisome quotes I’ve ever heard about theChinese economy. And they are from the head of the International Monetary Fund.
“We started with China at 11% growth, then 8%, then 7%then China will probably grow at 5% or 6%. Thepossibility of a global recession is real, we realize something must be [...]
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